Perfect World - Comparative Multiple Analysis

Perfect World (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Perfect World

WikiWealth compares Perfect World'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 Perfect World's comparative analysis.

Notes from the analysis:

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

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

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

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