Cavium Networks - Comparative Multiple Analysis

Cavium Networks (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Cavium Networks

WikiWealth compares Cavium Networks'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 Cavium Networks's comparative analysis.

Notes from the analysis:

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


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

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

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