Choice Hotels - Comparative Multiple Analysis

Choice Hotels (Comparative Multiple Analysis)

placeholder_large_analysis.png
Banner%20-%20The%20perfect%20tool%20for%20investors%281%29.gif

Notes on the Comparative Multiple Analysis of Choice Hotels

WikiWealth compares Choice Hotels'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 Choice Hotels's comparative analysis.

Notes from the analysis:

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


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

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

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