Valuation – Comparable Companies
Articles
Comparable Company Analysis (CCA): A Complete Guide to Relative Valuation
How do investors determine whether a stock is overvalued or undervalued? One of the most commonly used valuation techniques is Comparable Company Analysis (CCA), also known as Relative Valuation.
What Does a Valuation Multiple Actually Mean? EV/EBITDA and P/E Explained
EV/EBITDA, EV/Revenue, and P/E explained in plain English: what valuation multiples measure, why similar companies trade at different multiples, and how to read them like an interviewer expects.
How to Answer "What Does an EV/EBITDA Multiple of 8x Mean?" in an Interview
A step-by-step framework for EV/EBITDA multiple interview questions: how to compute the implied Enterprise Value, benchmark it, and explain what drives multiple gaps between peers.
What Is Comparable Company Analysis? Trading Comps Explained
A plain-English guide to comparable company analysis (trading comps): how peer sets are built, why EBITDA gets adjusted, and how EV/EBITDA multiples are read.
How to Answer a Comparable Company Analysis Interview Question
A step-by-step framework for answering comps interview questions: picking peers, scrubbing one-time items, and defending your implied valuation.
LTM vs NTM Multiples: What's the Difference and Why It Matters in Valuation
LTM and NTM EV/EBITDA multiples can tell very different stories about the same company. Here's what each measures, why they diverge, and when to trust which one.
How to Answer an LTM vs NTM Multiples Interview Question
A step-by-step framework for explaining why a company's trailing and forward EV/EBITDA multiples diverge, with a worked example and the follow-up interviewers expect.
Cases
What Is a Valuation Multiple?
How to read "8x EBITDA," what it implies about the business
Comparable Company Analysis
Peer selection, scrubbing one-time items, reading the multiple spread
LTM vs. NTM Multiples
As an equity research associate, you are tasked with computing a fast-growing target's EV/EBITDA multiple on both a trailing (LTM) and forward (NTM) basis, and using the comparison to peers to judge whether the stock is really as expensive as the trailing multiple suggests.