Big 5 Sporting Goods - Comparative Multiple Analysis

Big 5 Sporting Goods (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Big 5 Sporting Goods

WikiWealth compares Big 5 Sporting Goods'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 Big 5 Sporting Goods's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Big 5 Sporting Goods.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Big 5 Sporting Goods'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 Big 5 Sporting Goods's Analysis

How does this work? The Comparative Investment Analysis determines the value of Big 5 Sporting Goods by comparing Big 5 Sporting Goods 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 Big 5 Sporting Goods.

See the Big 5 Sporting Goods cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Big 5 Sporting Goods.

Also, see the Big 5 Sporting Goods's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Big 5 Sporting Goods's valuation conclusion for a quick summary.