Market multiples views
Market multiples tables
There are 3 market multiples table views available on Infront Analytics Platform. They are available under "Comparable Analysis".
| Market multiple | Description |
|---|---|
| Current multiples | Refer to valuation multiples calculated using the current value for the Enterprise Value (EV). Current multiples view includes:
|
| Historical multiples | Includes up to 5 years of history on multiples. |
| Forecast multiples | Includes up to 4 years of multiples based on consensus estimates. |
On most views, you can click a multiple figure to check the underlying calculation formula.
It is also possible to customize the way current EV is calculated.
Multiples based on per-share metrics (such as earnings per share or book value per share) are calculated using the last closing price, while multiples based on company-level metrics (such as net sales, EBIT or EBITDA) are calculated using the current market cap or EV.
EV is not a suitable metric for financial institutions (banks and insurance firms) because interest is a critical component of both revenue and expenses. Likewise, EBIT or EBITDA are not calculated because separating operating and financing activities is impossible as interest, investments, and debt are related to the company’s core operations. For insurance firms, analysts tend to use the concept of embedded value, which unfortunately is not available on Infront Analytics.
Multiples charts
Multiple charts provide you with an effective way to quickly analyze a company's valuation over a period of time, and compare it against the valuation of another company, a watchlist or a market index.
The view features 4 different charts, each one displaying the historical chart for a valuation multiple. By default, each chart shows historical multiples for the selected company vs. the predefined list of international peers (Companies interface), or for the selected personal list (My Lists interface). You can add a new line chart selecting in "Chart Settings" any other company list, a second company, a sector or an index.
For lists, sectors and indices, the curve displays the median multiple of the data set.
For indices, an alternate aggregation method called "mass average" can be selected, in that case the calculation is weighted by market capitalization.
You can use the menu icon shown in the top-right corner of the chart to print it or export it as an image or PDF file.
Multiples charts are not available for insurance firms. NTM multiples charts are not available for companies with no consensus estimates; instead, select LTM in "Calculation Options".
Market multiples depend on reporting model.
Financial statements for banks, insurance firms and other financial institutions differ significantly from those of so-called industrial firms involved in manufacturing and providing services. For such firms, there is indeed no clear difference between operating and financing activities because interest, investments and debt are related to the company’s core operations. The section traditionally found at the bottom of the income statement for industrial companies "moves up" as interests, premiums, dividends, fees or commissions become an essential part of their operating income, referred to as Total Revenue or Total Income instead of Net Sales. Likewise, the concept of EBITDA or EBIT is not relevant for non-industrial companies, except for financial institutions which are more similar to industrial firms.
For that reason, we automatically adjust the display template in views showing valuation multiples according to the reporting model of the selected company.