Prospect Capital - Comparative Multiple Analysis

Prospect Capital (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Prospect Capital

WikiWealth compares Prospect Capital'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 Prospect Capital's comparative analysis.

Notes from the analysis:

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

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

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

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