Picking the Right Peers and Adjusting for Differences

The hardest part of multiples analysis isn't computing the ratio — it's finding truly comparable firms and adjusting for differences in growth, risk, and profitability.

ComparablesPeer GroupAdjustmentSector Analysis

Live Result

18.00

ƒ: peer_multiple * (target_growth / peer_growth…raw: 18.0000

ƒ(x)

Use variable names from the panel above (e.g. FV, r, n) — or type numbers directly: 10000 / (1 + 0.08)^10

peer_multiple

Average EV/EBITDA or PE of peer group

peer_multiple = 12

target_growth% as decimal

Your company's expected growth rate

target_growth = 0.15

peer_growth% as decimal

Peer group average growth rate

peer_growth = 0.10

target_margin% as decimal

Your company's EBITDA margin

target_margin = 0.25

peer_margin% as decimal

Peer group average EBITDA margin

peer_margin = 0.20

💡 You can also enter values directly in the formula: 10000 / (1 + 0.08)^10

⬇ Export Calculation

Exports a plain .txt file with your expression, formula, all variable values, result, and educational notes — ready to paste into any report, Word doc, Notion, or Google Docs.

The exported file includes the formula in standard mathematical notation — you can paste it directly into Excel, Google Sheets, or back into FinanceSheep.

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Learn: Picking the Right Peers and Adjusting for Differences

Relative Valuation · Educational Guide

The Core Idea

You've found five comparable companies trading at 12× EV/EBITDA. But your company grows 15% vs their 10% average, and has higher margins. Should you use 12×? Or something higher?

How It Works

Adjust multiples for differences in growth, risk, and profitability. A company growing faster deserves a higher multiple. Higher margins deserve a higher multiple. Higher risk deserves a lower multiple. The adjustments should be systematic and DCF-grounded, not arbitrary.

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Real-World Example: Peers trade at 12× EV/EBITDA growing 10%. Your company grows 15%. Growth-adjusted multiple = 12 × (15%/10%) = 18×. Peers have 20% EBITDA margin; you have 25%. Margin adjustment = 18 × (25%/20%) = 22.5×. Apply 22.5× to your EBITDA for a peer-comparable enterprise value.

Picking the Right Peers and Adjusting for Differences

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