ChannelPulse
Comps and precedents — a range, with reasons
Trading comps look like the easy valuation method and are the one most often done badly. This builds a comp set from six companies, finds a 9x-to-20x spread hiding behind a tidy 13x median, applies the range to a target, and works through the adjustments — calendarisation, non-recurring items, leases, control premia — that decide whether the multiple means anything.
What you'll be able to do
- Compute EV/Revenue and EV/EBITDA correctly, including what belongs in enterprise value
- Explain why the median and the range beat the mean, and when to exclude a comparable
- Apply a multiple range to a target and bridge from enterprise value to a share price
- List the adjustments that make multiples comparable, and say how precedent transactions differ from trading comps
Before this: a-dcf-you-can-defend
The rest of this lesson is in the app
Trading comps look like the easy valuation method and are the one most often done badly. This builds a comp set from six companies, finds a 9x-to-20x spread hiding behind a tidy 13x median, applies the range to a target, and works through the adjustments — calendarisation, non-recurring items, leases, control premia — that decide whether the multiple means anything. This walkthrough runs about 24 minutes, with runnable code you can edit and re-run as you read.
Continue in ChannelPulseThe first module of every track is free to read on the web — see what's open in Finance.