Comparable company analysis (comps)
Principles of Finance glossary · Valuation of Bonds & Stocks
Definition
Valuation method using trading multiples (EV/EBITDA, P/E, P/B) from publicly traded peer firms.
Comparable company analysis (comps) in plain English
Comps is a way to estimate what a company is worth by looking at what similar public companies actually sell for. You pick a handful of comparable firms, then use ratios (called multiples) like price-to-earnings that show how many dollars investors pay per dollar of profit, and apply those same ratios to your company. It's exactly how a real estate agent prices a house: check what similar homes nearby recently sold for, then work out a fair price per square foot. The logic is that comparable businesses should trade at comparable ratios, so the market's opinion of the peers hints at what yours is worth.
Also called: comps
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Practice Comparable company analysis (comps)
An analyst is looking at a 'Football Field' chart in a… What is the most likely reason for this?
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