Lumber Liquidators - Comparative Multiple Analysis

Lumber Liquidators (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Lumber Liquidators

WikiWealth compares Lumber Liquidators'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 Lumber Liquidators's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Lumber Liquidators.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Lumber Liquidators'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 Lumber Liquidators's Analysis

How does this work? The Comparative Investment Analysis determines the value of Lumber Liquidators by comparing Lumber Liquidators 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 Lumber Liquidators.

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

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