Hewlett-Packard - Comparative Multiple Analysis

Hewlett-Packard (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Hewlett-Packard

WikiWealth compares Hewlett-Packard'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 Hewlett-Packard's comparative analysis.

Notes from the analysis:

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

How does this work? The Comparative Investment Analysis determines the value of Hewlett-Packard by comparing Hewlett-Packard 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 Hewlett-Packard.

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

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