Universal American - Comparative Multiple Analysis

Universal American (Comparative Multiple Analysis)

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

Notes on the Comparative Multiple Analysis of Universal American

WikiWealth compares Universal American'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 Universal American's comparative analysis.

Notes from the analysis:

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


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

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

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