Comparable Company Analysis

Comparable Company Analysis is a financial method used to evaluate a company’s value by comparing it to similar firms in the same industry. Analysts look at key metrics like earnings, sales, and market values of these peer companies to determine how the target company measures up. This analysis helps investors gauge whether a company is overvalued or undervalued relative to its competitors. By understanding the market dynamics and financial performance of similar businesses, stakeholders can make informed investment decisions or assess the potential sale price of a company.