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.

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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.

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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

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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.

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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.

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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.

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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.

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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.

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Troubleshooting

Peer data looks inconsistent

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

Multiples look extreme

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

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Related guides

• Consumer Goods, FMCG & CPG Manufacturers

• Stock Ticker (Fundamentals Import)

• Terminal Value Rules

• Selecting Series for Charts