SFC Valuation Model - Relative

Comparable company analysis, or “Comps” for short, is commonly used to value firms by comparing them to publicly traded companies with similar business operations. An analyst will compare the current share price a public company relative to some metric such as its earnings to derive a P/E ratio. It will then use that ratio to value the company it is trying to determine the worth of.

One of the most popular relative valuation multiples is the price-to-earnings (P/E) ratio. It is calculated by dividing stock price by earnings per share (EPS), and is expressed as a company's share price as a multiple of its earnings. A company with a high P/E ratio is trading at a higher price per dollar of earnings than its peers and is considered overvalued. Likewise, a company with a low P/E ratio is trading at a lower price per dollar of EPS and is considered undervalued. This framework can be carried out with any multiple of price to gauge relative market value. Therefore, if the average P/E for an industry is 10x and a particular company in that industry is trading at 5x earnings, it is relatively undervalued to its peers.

Limitations
Like any valuation tool, relative valuation has its limitations. The biggest limitation is the assumption that the market has valued the business correctly.

Second, all valuation metrics are based on past performance. Investors' perceptions of future performance heavily influence stock prices and most relative valuation metrics don’t account for growth.

Finally and most importantly, relative valuation is no assurance that the "cheaper" company will outperform its peer.

With this indicator, investors can easily compare a few companies and find the outlier. It calculates the average for the sector and highlights the stock that is above the average.

Due to some limitations, the indicator can only compare 5 tickers, but users can always load it twice for more stocks.

Save hours of data entry into Excel spreadsheets to compare stocks !

There are few valuation methods/steps
- Macroeconomics - analyse the current economic;
- Define how the sector is performing;
- Relative valuation method - compare few stocks and find the Outlier;
- Absolute valuation method historically- define how the stock performed in the past;
- Absolute valuation method - define how the stock is performed now and find the fair value;
- Technical analysis

How to use:
1. Once you have completed the initial evaluation steps, simply load the indicator.
2. Add the forwarded EPS.
3. The indicator will do the rest of the calculations for you.

リリースノート:

- Added average value for other metrics
- Average values are now available in the table
- Default ticker can be changed
- Source inputs are available - The user can load the indicator 2, 3 times. By adding the average values from the another tables the indicators will calculate the average automatically.

*The last feature is very important. Now the user can define which stock is the outliar for the whole sector, not only 5 tickers.

リリースノート:

- added new ticker
- Because of the different information about EPS I had to change the inputs. From now the user have to add EPS0 (trailing EPS), EPS1(estimated for the current year), EPS2(estimated for next year)

リリースノート:

- fixed the average value for PEG, when EG is 0

リリースノート:

- added CAGR

リリースノート:

- added ROE