Editing Oracle Corporation
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== Comparable Company Analysis == | == Comparable Company Analysis == | ||
Our second method for valuing Oracle was comparable company analysis. Price/earnings, Enterprise Value/EBITDA, and Enterprise Value/Revenue ratios were used. The companies selected were the direct competitors, as mentioned above. | Our second method for valuing Oracle was comparable company analysis. Price/earnings, Enterprise Value/EBITDA, and Enterprise Value/Revenue ratios were used. The companies selected were the direct competitors, as mentioned above. | ||
[[File:Screenshot 2023-08-23 3.jpg|thumb|994x994px|Comparables table | [[File:Screenshot 2023-08-23 3.jpg|thumb|994x994px|Comparables table]] | ||
To begin, the EV/Sales metric was employed. This involved taking the revenue from the past year and multiplying it by the median EV/Sales ratio of competing firms. As a result, the estimated enterprise value stood at $278,895 million. After accounting for net debt, it became evident that the equity value equated to $193,752 million or $71.38 per share. Consequently, based on this ratio, the company appears to be overvalued compared to its peers. | To begin, the EV/Sales metric was employed. This involved taking the revenue from the past year and multiplying it by the median EV/Sales ratio of competing firms. As a result, the estimated enterprise value stood at $278,895 million. After accounting for net debt, it became evident that the equity value equated to $193,752 million or $71.38 per share. Consequently, based on this ratio, the company appears to be overvalued compared to its peers. |