Smith Intl - Comparative Multiple Analysis

Smith Intl (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Smith Intl

WikiWealth compares Smith Intl'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 Smith Intl's comparative analysis.

Notes from the analysis:

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


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

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

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