Walk me through how you would build a comparable companies analysis

First I pick the peer set. The most important criterion is a similar business: same industry, products and customers. Then I narrow by size, growth, margins and geography, aiming for roughly five to fifteen companies. If the list is thin, I widen it and note which peers are the closest.

Next I spread the financials. I pull historical figures from annual and quarterly filings and projections from consensus estimates, along with current share prices. For each company I calculate diluted equity value using the treasury stock method, then enterprise value by adding debt, preferred stock and noncontrolling interest and subtracting cash.

Then I clean the numbers so they are comparable. I strip out one-time items such as restructuring charges or asset sale gains, calendarize everyone to the same period if fiscal years differ, and adjust for accounting differences such as lease treatment under IFRS. Only then do I calculate multiples, usually EV/Revenue, EV/EBITDA and P/E for the last twelve months and forward years. I look at the 25th percentile, median and 75th percentile, pick a range based on where the target fits on growth and margins, and apply it to the target's metrics to get an implied value range.