Forest Labs - Comparative Multiple Analysis

Forest Labs (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Forest Labs

WikiWealth compares Forest Labs'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 Forest Labs's comparative analysis.

Notes from the analysis:

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

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

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

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