Episode 24: Peer Groups: Qualitative Assessment

SUMMARY

This episode of The EC Minute takes a look at the second step in picking or updating a peer group–the qualitative assessment.¬† After a company has a pool of potential peers using the quantitative assessment process, looking for companies that are within a reasonable range of the subject company, the next step is to consider the characteristics of each potential peer to determine if they, in fact, would make a good peer for the subject company.

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Episode 23: Peer Groups: Quantitative Assessment

 SUMMARY

This episode of The EC Minute takes a look at the quantitative assessment that goes into creating, reviewing and updating a company’s peer group. Using quantitative metrics, companies typically generate a list of companies that are similar to them. Companies often use ranges of 1/3x to 3x or 1/2x to 2x in applying the metrics they decide to use.¬† Most often, these metrics are run against companies in the same or similar GICS industry group(s). The goal is to generate a list of 25-50 potential peer companies that can then be refined using a qualitative assessment to derive a comparator/peer group consisting of 15-20 companies.

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Click here to download the slides for Episode 23.