BMC Software - Comparative Multiple Analysis

BMC Software (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of BMC Software

WikiWealth compares BMC Software'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 BMC Software's comparative analysis.

Notes from the analysis:

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

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

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

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