Comparable company analysis
Comparable company analysis values a target by applying the trading multiples of similar listed firms — such as EV/EBITDA or P/E — to the target's own financial metrics. It provides a market-grounded benchmark alongside a DCF valuation.
FrameworkRelative valuation
See it move
A peer group of similar listed companies trades at a median EV/EBITDA multiple of 9.0 times. Applying that market-derived multiple to the target's own EBITDA of €40 million implies an enterprise value of €360 million. The multiple comes from the market, not the target, so the result acts as a reality check on a separate DCF valuation, which can rest on more optimistic assumptions.
Check yourself
An analyst conducting a comparable company analysis for Thornwood Ltd selects five publicly listed peers and derives a median EV/EBITDA multiple of 8.5×. Thornwood's EBITDA is £22 million. What is the implied enterprise value for Thornwood?