Charles Schwab - Comparative Multiple Analysis

Charles Schwab (Comparative Multiple Analysis)

placeholder_large_analysis.png
Banner%20-%20The%20perfect%20tool%20for%20investors%281%29.gif

Notes on the Comparative Multiple Analysis of Charles Schwab

WikiWealth compares Charles Schwab'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 Charles Schwab's comparative analysis.

Notes from the analysis:

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


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

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

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