A small cap is a listed company whose market capitalisation is generally between €50 million and €1 billion. In Europe, they list mainly on Euronext Growth and Euronext Access. This segment offers outperformance potential linked to informational inefficiency.

Can market capitalisation exceed the company's real value?

Yes, this is common for growth companies or sectors in high demand. Market cap reflects the market's future expectations, not just current assets. A P/E of 40x means the market is paying 40 years of current earnings — it anticipates strong future growth.

Market Capitalisation: Definition and Categories

Q: What is the difference between market capitalisation and enterprise value?

Market capitalisation represents the market value of equity alone (what the company is worth to its shareholders). Enterprise value (EV) adds net debt: EV = Market cap + Net debt. EV represents what it would cost to buy the whole company, debt included.

Q: How are market capitalisation and liquidity linked?

The higher the market cap, the better liquidity usually is (many shareholders, large daily volumes). For small caps below €50M of market cap, liquidity can be very limited — a few tens to a few hundreds of thousands of euros traded per day. This creates a liquidity risk to factor into position sizing.

Definition and formula

Market capitalisation (or market cap) is the total market value of a listed company's equity. It represents what the market values the company at for its shareholders at a given moment.

Formula: Market capitalisation = Share price × Number of shares outstanding

If a company has 5 million shares outstanding and a share price of €20, its market capitalisation is €100 million.

Shares outstanding ≠ shares issued: treasury shares (bought back by the company) should not be included in the calculation. Use the number of shares outstanding (diluted shares outstanding) found in the financial statements.

Market capitalisation calculator

Market cap & enterprise value calculator

Share price (€)

Shares outstanding (thousands)

Net debt (€k)

EBITDA (€k)

€106.3M

Market capitalisation

€121.3M

Enterprise value (EV)

10.1x

EV / EBITDA

Market-cap classification

Category	Market cap	European market	PEA-PME (FR)
Micro-cap	< €50M	Euronext Access	Partial
Small cap	€50M – €1bn	Euronext Growth	Eligible
Mid cap	€1 – €10bn	Euronext regulated markets	Partial
Large cap	> €10bn	Blue-chip indices (CAC 40, DAX, etc.)	Not eligible

Market cap vs Enterprise value (EV)

Market capitalisation represents only the value of equity — the shareholder portion. Enterprise value (EV) is more complete: it includes net debt and represents the real cost of acquiring the entire company.

Market capitalisation

Price × No. of shares

Value to shareholders only. Used to calculate the P/E (earnings per share). Does not account for debt.

Enterprise value (EV)

Market cap + Net debt

Value to all providers of capital. Used for EV/EBITDA, EV/Revenue. Allows comparison of companies with different financial structures.

For valuation comparisons between companies in the same sector but with different levels of debt, EV is always preferable to market cap alone.

The limitations of market capitalisation

It fluctuates in real time with the share price — a company can see its market cap move 20% in a few weeks with no fundamental change.
It does not account for debt — a heavily indebted company can look cheaper than a healthy one if you compare market caps alone.
It can be skewed by the free float: on small caps with a dominant controlling shareholder, the free float (the fraction actually tradable) can be much smaller than the total market cap.

Market cap and EV calculated for 800+ small caps

Screener Small Caps tracks the market capitalisation and enterprise value of the Euronext Growth universe, updated daily.

Open the screener →

New to screening European small caps? See the European small-cap stock screener guide and the glossary.

Frequently asked questions

How do you calculate market capitalisation?▾

Market cap = Share price × Number of shares outstanding. Example: 8 million shares × €15 = €120M market capitalisation.

What is the difference between market capitalisation and enterprise value?▾

Market cap = value of equity (to shareholders). EV = market cap + net debt = the price to buy the whole company, debt included. To compare companies with different levels of debt, always use EV.

What is a small cap?▾

A listed company with a market cap between €50M and €1bn. In Europe, listed mainly on Euronext Growth. Eligible for the PEA-PME (in France). Outperformance potential thanks to informational inefficiency.

Can market cap exceed real value?▾

Yes, frequently for growth stocks. Market cap reflects future expectations — a P/E of 40x anticipates high growth. That is why comparison with intrinsic value is essential.

How are market capitalisation and liquidity linked?▾

The higher the market cap, the better liquidity usually is. For micro-caps below €50M, daily volumes can be very thin (a few tens of thousands of euros). Adjust your position sizes accordingly.