Relative valuation toolkit

Relative valuation infers what an asset is worth from what the market pays for similar assets. It is pricing, not valuation. A stock can be cheap against its comparable group and still be badly overpriced in absolute terms — in a bubble the whole group is wrong together. Say "cheap versus these peers", never "cheap".

Practice runs on this method. Roughly 85% of equity research reports and more than half of acquisition valuations rest on multiples, and plenty of discounted cash flow models are relative valuations in disguise, with a terminal value set at 8x year-5 EBITDA.

The arithmetic here is scripted. Your job is choosing the comparable set, choosing the control technique, and deciding what an unexplained residual means.

The script

resources/multiples.py — pure standard library, no installation needed. Every subcommand takes JSON on stdin (or --in FILE) and prints JSON.