Comparable Company Analysis
Value a company off its peers - trading comps, the right multiples, and precedent transactions
5
modules
10
lessons
~1h
to complete
The relative-valuation method every banker runs alongside a DCF: pick a peer set, choose the right multiples, and turn them into an implied value - plus precedent transactions and the control premium.
Your progress
10 lessons
12
Relative Valuation
Value a company by what similar companies are worth - the fastest read on what the market will pay.
- ✓6m1.1Valuing by ComparisonComparable company analysis prices a business off the multiples its peers trade at, on the logic that similar companies should trade similarly.
- ✓5m1.2When Comps Shine (and Fail)Comps are quick and grounded in real prices, but they inherit the market's mood and need a clean peer set.
- ?Module checkpointquiz →
22
Building a Comp Set
Pick the right peers and pull clean data - the part of comps that actually takes judgment.
32
The Multiples
EV vs equity multiples, the matching principle, and which one fits the company in front of you.
- ✓6m3.1EV vs. Equity MultiplesPair pre-interest metrics with enterprise value and after-interest metrics with equity value. Mismatching is the classic error.
- ✓6m3.2Which Multiple, WhenEV/EBITDA is the workhorse; P/E suits stable earners; EV/Revenue is for high-growth or unprofitable companies.
- ?Module checkpointquiz →
42
From Multiples to a Value
Summarize the peer set, apply the median to your target, and reason about premium or discount.
- ✓5m4.1Summarize the SetReport the range and central tendency of peer multiples, and lean on the median to keep outliers from distorting the read.
- ✓7m4.2Apply to the TargetMultiply the chosen peer multiple by the target's metric to get implied value, then judge whether the target deserves a premium or discount.
- ?Module checkpointquiz →
52
Precedent Transactions
Valuing off past M&A deals - and the control premium you must not double-count.
- ✓5m5.1Deal CompsPrecedent transactions value a company off the multiples paid in comparable past acquisitions, which tend to run higher than trading comps.
- ✓6m5.2The Control PremiumA control premium (often 20-40%) is the extra paid for control. It is already baked into transaction multiples - do not add it twice.
- ?Module checkpointquiz →