# Build a Relative Valuation Using Fundamentals

This guide explains how to build a fundamentals-based relative valuation in Model Reef by importing peer data and comparing metrics and multiples.

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## Before you start

You should know:

* Which peer companies or comparables you want to analyse.
* Which metrics matter most for your sector (for example revenue growth, EBITDA margin, EV to EBITDA, P to E).
* Whether you want to use market data, internal benchmarks or both.

***

## What you will build

* Imported fundamental series for peer companies.
* Charts and tables comparing your company against peers.
* A relative valuation view that positions your business within a peer set.

***

{% stepper %}
{% step %}

### Step 1: Import peer fundamentals

You can import fundamentals in several ways.

#### Option A: Stock Ticker fundamentals

* Use the **Stock Ticker** import.
* Enter tickers for peer companies.
* Import available fundamentals, such as:
  * Revenue
  * COGS
  * EBITDA
  * Net income
  * Balance sheet items

#### Option B: CSV or manual import

* Prepare a CSV with peer metrics by period or as point-in-time values.
* Import into the Data Library as custom or driver entries, for example:
  * `Peer1 - EBITDA`
  * `Peer2 - EBITDA`
  * `Peer1 - EV`
  * `Peer2 - EV`
    {% endstep %}

{% step %}

### Step 2: Structure peer data in the Data Library

Once imported:

* Group peer items with clear naming, for example:
  * `Peer - Company A - Revenue`
  * `Peer - Company A - EBITDA`
  * `Peer - Company A - EV`
* Tag entries to identify:
  * That they belong to the peer set.
  * The metric type (Revenue, EBITDA, EV, etc.).

This organisation makes charting and reporting easier.
{% endstep %}

{% step %}

### Step 3: Create relative metrics and multiples

Using custom formulas:

* Build series such as:
  * EV to EBITDA for each peer:
    * `EV_EBITDA_PeerA = EV_PeerA ÷ EBITDA_PeerA`
  * Growth rates:
    * `Growth_Revenue_PeerA` series representing historical or expected growth
* Build similar metrics for your own model:
  * EV may come from your own valuation outputs
  * EBITDA and revenue exist within your model already

Store these as additional Data Library entries or chart formulas as needed.
{% endstep %}

{% step %}

### Step 4: Build comparison charts and tables

In your model dashboards:

* Create charts that show:
  * Your company versus peers on EBITDA margin
  * Your company versus peers on revenue growth
  * Valuation multiples (for example EV to EBITDA, EV to revenue)
* Create tables that summarise:
  * Metric level
  * Peer averages
  * High and low values
  * Your company positioning

Use these views to identify whether your pricing or expectations are conservative, aggressive or aligned with peers.
{% endstep %}

{% step %}

### Step 5: Link relative valuation back to your DCF

Relative valuation is often used as a cross check against DCF and FCFE results.

* Compare:
  * The implied multiples from your FCFF or FCFE valuations
  * The range of multiples observed in peers
* Ask:
  * Is your DCF or equity value consistent with what the market is paying for similar businesses?
  * Are you implicitly assuming a premium or discount relative to peers?

This helps interpret whether your DCF is too optimistic or conservative.
{% endstep %}
{% endstepper %}

***

## Check your work

* Peer fundamentals are imported and labelled clearly.
* Relative metrics such as EV to EBITDA or EV to revenue are computed correctly.
* Charts and tables reflect the correct data series.
* Your company’s valuation is contextualised within a realistic peer range.

***

## Troubleshooting

<details>

<summary><strong>Peer data looks inconsistent</strong></summary>

Ensure you are using the same fiscal year definitions, currency and accounting standards where possible. You may need to adjust or normalise externally.

</details>

<details>

<summary><strong>Multiples look extreme</strong></summary>

Check that EBITDA and EV are aligned in time and definition. Adjust for one-off items or outliers.

</details>

***

## Related guides

* [Consumer Goods, FMCG & CPG Manufacturers](/use-cases/consumer-goods-fmcg-and-cpg-manufacturers.md)
* [Stock Ticker (Fundamentals Import)](/help/stock-ticker-fundamentals.md)
* [Terminal Value Rules](/help/financial-outputs-and-valuation/terminal-value-rules.md)
* [Selecting Series for Charts](/syntax/chart-and-table-syntax/selecting-series-for-charts.md)


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