PriceSmart - Comparative Multiple Analysis

PriceSmart (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of PriceSmart

WikiWealth compares PriceSmart'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 PriceSmart's comparative analysis.

Notes from the analysis:

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

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

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

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