Builders FirstSource - Comparative Multiple Analysis

Builders FirstSource (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Builders FirstSource

WikiWealth compares Builders FirstSource'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 Builders FirstSource's comparative analysis.

Notes from the analysis:

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

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

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

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