Valeant Pharma - Comparative Multiple Analysis

Valeant Pharma (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Valeant Pharma

WikiWealth compares Valeant Pharma'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 Valeant Pharma's comparative analysis.

Notes from the analysis:

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

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

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

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