Facebook - Comparative Multiple Analysis

Facebook (Comparative Multiple Analysis)

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Improve your investment analysis with by seeing the Facebook's Discounted Cash Flow analysis, Facebook's Warren Buffet analysis, and Facebook's Weighted Average Cost of Capital (WACC) Analysis.

Notes on the Comparative Multiple Analysis of Facebook

WikiWealth compares Facebook's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Facebook's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Facebook.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Facebook's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Facebook's Analysis


How does this work? The Comparative Investment Analysis determines the value of Facebook by comparing Facebook financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Facebook.

See the Facebook cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Facebook.

Also, see the Facebook's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Facebook's valuation conclusion for a quick summary.