Equity Research Analysis

Kenya Lopez Costco Wholesale Corp. ( NASDAQ: COST) FIN 4370 Even when the Discounted Cash Flow Model considers the most approachable assumptions to account for intrinsic value, doing other type analysis as valuation multiples would be helpful to determine how far or close we are from a previous valuation and support a final decision. There are different metrics one can use for valuation multiples: Price-Earnings (PE): applies the mean price-earnings ratio based on expected earnings of all traded competitors to the firm’s expected earnings for the following years. It assumes that growth’s earnings would be similar to the industry. E nterprise Value (EV) to revenue : This ratio gives investors a quantifiable measure of the company’s value to its sales. It determines how many dollars of EV are generated for every dollar of yearly sales. It provides a better overview of increases and decreases in comparing other companies. However, does not consider operation expenses....