IESE Insight The Big Picture: The new drivers of value

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The Big Picture: The new drivers of value

To estimate the market value of a public company, it's common to do a comparable company analysis, calculating a target company's value based on what other, similar companies in the market are worth. However, as the boundaries between industries get blurrier, the comparable for a company like Tesla or Ferrari may not, in fact, be another car company. You need to analyze the business model first to determine where the real value lies. Your closest comparable may surprise you.

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SOURCE: Calculations done by MBA students as part of a Corporate Finance course taught by IESE finance professor Carles Vergara. Data based on 2022 forward-looking multiples from S&P Global Market Intelligence (as of July 2021).

This article is based on: The Big Picture: The new drivers of value
Year: 2021
Language: English