AO Smith Corp - Comparative Multiple Analysis

AO Smith Corp (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of AO Smith Corp

WikiWealth compares AO Smith Corp'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 AO Smith Corp's comparative analysis.

Notes from the analysis:

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


How does this work? The Comparative Investment Analysis determines the value of AO Smith Corp by comparing AO Smith Corp 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 AO Smith Corp.

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

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