Berkshire Hathaway - Comparative Multiple Analysis

Berkshire Hathaway (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Berkshire Hathaway

WikiWealth compares Berkshire Hathaway'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 Berkshire Hathaway's comparative analysis.

Notes from the analysis:

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

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

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

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