Northrop Grumman - Comparative Multiple Analysis

Northrop Grumman (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Northrop Grumman

WikiWealth compares Northrop Grumman'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 Northrop Grumman's comparative analysis.

Notes from the analysis:

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

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

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

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