Equity Valuation Models
Economic Value Added and Value Drivers
EVA charges profit for all capital employed: NOPAT minus invested capital times WACC, decomposed into margin, turnover, and capital-efficiency drivers.
intermediate 2026-01-28
Equity Valuation Models
20 articles in this subtopic.
Equity Valuation Models
Using Comparable Transactions Data
Precedent M&A multiples capture the 20-40% control premiums trading comps miss, provided deals are screened for timing, buyer type, and synergies.
intermediate 2026-01-26
Equity Valuation Models
Incorporating Options and Warrants into Valuation
Learn how to properly adjust equity valuations for dilution from stock options, warrants, and convertible securities.
advanced 2026-01-25
Equity Valuation Models
Valuing Negative Earnings or Early-Stage Companies
Revenue multiples, LTV/CAC unit economics, and explicit path-to-profitability modeling replace P/E when earnings are negative, plus red flags to walk away.
intermediate 2026-01-06
Equity Valuation Models
Residual Income and Excess Return Models
Calculate residual income and EVA to measure true economic profit, with worked examples showing when these models beat DCF for non-dividend payers.
intermediate 2026-01-01
Equity Valuation Models
Documenting Valuation Assumptions Clearly
Documenting the source, rationale, range, and update triggers behind every key valuation assumption turns unexplainable losses into a testable process.
advanced 2025-12-31
Equity Valuation Models
Selecting Discount Rates with CAPM and WACC
The discount rate is the most sensitive DCF input; building cost of equity via CAPM and blending WACC with market-value weights keeps valuations honest.
intermediate 2025-12-26
Equity Valuation Models
Scenario and Sensitivity Analysis Techniques
A 1% WACC shift can move a DCF valuation 10-15%, so data tables, tornado charts, and coherent bull-bear scenarios turn false precision into honest ranges.
intermediate 2025-12-13
Equity Valuation Models
Dividend Discount Models for Mature Companies
Apply the Gordon Growth Model, two-stage DDM, and H-model to value dividend-paying stocks, with worked examples showing why r must exceed g.
intermediate 2025-12-12
Equity Valuation Models
P/E Multiple Selection: Trailing, Forward, and CAPE
The price-to-earnings ratio is the single most quoted valuation metric in finance—and the single most misapplied.
intermediate 2025-12-11
Equity Valuation Models
Calibrating Target Prices with Risk/Reward
A target price becomes a decision only when paired with downside: risk/reward ratios, implied win rates, and half-Kelly math size the position.
advanced 2025-11-11
Equity Valuation Models
EV/EBITDA and EV/EBIT: When to Use Each
Compare EV/EBITDA (28x for software, 5x for oil & gas) vs EV/EBIT with worked examples showing why depreciation policies drive the choice.
intermediate 2025-11-08
Equity Valuation Models
Discounted Cash Flow Valuation: A Practitioner's Guide
Master DCF fundamentals including FCFF vs FCFE mechanics, terminal value methods, and the 70-80% terminal value reality that makes or breaks your model.
advanced 2025-11-03
Equity Valuation Models
Adjusting for Share-Based Compensation and Dilution
Ignoring share-based compensation inflates tech valuations 15-30%; deduct SBC as a real expense or dilute shares via the treasury stock method.
intermediate 2025-10-24
Equity Valuation Models
Sum-of-the-Parts Valuation for Conglomerates
Sum-of-the-parts valuation prices each conglomerate segment at pure-play peer multiples, measuring the 13-15% discount that GE's breakup unlocked.
advanced 2025-10-24
Equity Valuation Models
Revenue Multiples for High-Growth Firms
EV/Revenue and the Rule of 40 make unprofitable growth firms comparable, but SaaS multiples swung from 24.6x to 5.5x ARR; context sets the number.
intermediate 2025-10-20
Equity Valuation Models
Checking Results Against Market-Implied Expectations
Reverse DCF solves for the growth rate embedded in today's price; if the market implies 18% and history says 12%, the stock must beat expectations to pay off.
intermediate 2025-10-15
Equity Valuation Models
Monte Carlo Simulation for Equity Valuation
Monte Carlo turns a single-point DCF into a probability distribution, showing how input uncertainty, correlations, and skew shape the valuation range.
advanced 2025-10-10
Equity Valuation Models
Glossary: Valuation Methodologies
Twenty-eight valuation terms defined concisely, from DCF components and WACC to control premiums, marketability discounts, EV/EBITDA, and CAPE.
beginner 2025-09-29
Equity Valuation Models
Common Pitfalls in DIY Valuation Models
Ten frequent DCF and multiples errors, from undiscounted terminal values to double-counted stock compensation, quantified by how far each inflates value.
advanced 2025-09-02