Extreme Networks - Comparative Multiple Analysis

Extreme Networks (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Extreme Networks

WikiWealth compares Extreme 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 Extreme Networks's comparative analysis.

Notes from the analysis:

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

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

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

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