Alliance Data - Comparative Multiple Analysis

Alliance Data (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Alliance Data

WikiWealth compares Alliance Data'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 Alliance Data's comparative analysis.

Notes from the analysis:

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


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

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

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