Advance Auto Parts - Comparative Multiple Analysis

Advance Auto Parts (Comparative Multiple Analysis)

placeholder_large_analysis.png
Banner%20-%20The%20perfect%20tool%20for%20investors%281%29.gif

Notes on the Comparative Multiple Analysis of Advance Auto Parts

WikiWealth compares Advance Auto Parts'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 Advance Auto Parts's comparative analysis.

Notes from the analysis:

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


How does this work? The Comparative Investment Analysis determines the value of Advance Auto Parts by comparing Advance Auto Parts 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 Advance Auto Parts.

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

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