Aerospace and Defense Company Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
Aerospace and defense businesses are valued with VA's industrial and services models: parts, systems and space hardware makers on earnings and cash flow with an asset floor, and government services contractors with the IT services approach, on their earnings.
How businesses in this sector are valued
Aerospace, defense and space manufacturers are valued with the industrial manufacturing approach: a discounted cash flow, comparable companies and precedent transactions, with an asset floor underneath; for a smaller company, precedent transactions carry the most weight. Government services contractors are valued with the IT and managed services approach: a smaller contractor whose revenue is not all recurring mainly on seller's discretionary earnings, EBITDA plus the owner's pay, times a multiple drawn from small-business transaction data, and other contractors on a discounted cash flow, comparable companies, precedent transactions and a bottom-up view of their economics. Contract backlog is not valued as a separate layer, so enter earnings for a typical year and read the backlog alongside the result. Certifications, long-term programs and customer concentration weigh on what buyers pay.
Guides in this sector
Aerospace & Defense Manufacturing
Value an aerospace or defense parts manufacturer on its earnings, with certifications, program positions and customer concentration read as buyers do.
Space Systems
Value a space hardware or satellite components company on its earnings, with contracts, flight heritage and customer concentration read as buyers do.
Government Contracting
Value a government services contractor on its earnings, with contract vehicles, recompete dates, set-aside status and clearances read as buyers do.
Also valued with these guides
Industrial Manufacturing
Value an industrial manufacturer on its earnings, with contracts, certifications, customer concentration and capital spending read as buyers read them.
IT Managed Services
Value a managed service provider on its earnings, with monthly contracts, client retention and the owner's role read the way buyers read them.
Value your business in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
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Further reading
Is a Business Worth 3 Times Profit? When It Is 2x, When It Is 5x, and Which Profit Counts
Is a business worth 3 times profit? Often, if the profit is SDE. When 2x or 5x applies instead, which profit counts, and what diligence does to the price.
How Much Is a Business Worth With $500,000 in Sales? The Revenue Ladder From $100K to $3 Million
Revenue does not set a price, earnings do. See what businesses at $100K, $200K, $300K, $500K, $1M, $2M and $3M in sales are worth at 10%, 20% and 30% margins.
Business Valuation Methods Explained: DCF vs. Comps vs. Precedent Transactions
The five business valuation methods professionals actually use (DCF, comparable companies, precedent transactions, SDE/EBITDA multiples, and asset-based), when each wins, and how they combine into one defensible number.
Frequently asked questions
How is an aerospace parts manufacturer valued?
With the industrial manufacturing approach: earnings and cash flow against comparable companies and precedent transactions, with the value of its assets as a floor.
How is a government contractor valued?
With the IT services approach. A smaller contractor whose revenue is not all recurring is valued mainly on seller's discretionary earnings times a multiple drawn from small-business transaction data; others on a discounted cash flow, comparable companies, precedent transactions and a bottom-up view. Buyers look closely at contract vehicles, recompete dates and security clearances.
Is contract backlog valued?
Not as a separate layer. Backlog shows how much revenue is secured ahead, so read it alongside the result rather than adding it on top.
Why is customer concentration common in defense?
Defense suppliers often sell mainly to a few prime contractors or government agencies. Buyers accept it when the contracts are long and the programs are funded, and pay less when they are not.
As featured in
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Last reviewed September 26, 2026 against VA's valuation models.