Acme Packet - Comparative Multiple Analysis

Acme Packet (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Acme Packet

WikiWealth compares Acme Packet'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 Acme Packet's comparative analysis.

Notes from the analysis:

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


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

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

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