Headwaters - Comparative Multiple Analysis

Headwaters (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Headwaters

WikiWealth compares Headwaters'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 Headwaters's comparative analysis.

Notes from the analysis:

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

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

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

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