How to find comparable companies for CCA?
Hi! Freshman here who know little to nothing about finance. I need help with valuation, and I was wondering if someone could explain to me how to find appropriate companies for a CCA. I've checked online and most websites just say some vague shit like "companies that are competitors" which I really don't understand. Lets say SONY and EA are competitors because they both occupy the gaming industry, but SONY encompasses much more beyond that where are EA only focuses on gaming. How can SONY's multiples be applied to EA's? Thank you. Any advice is appreciated.
Then they aren't good comparable companies (disclaimer: I have not looked in EA or Sony at all and just thinking off the top of my head). For one, Sony is in the gaming industry but largely focused in the hardware space while EA is a game developer. As you noted, Sony is much, much more than gaming as well. If you wanted to pick something to compare to EA, I would look at something like Take-Two Interactive or Activision Blizzard. You could also try to split up the value of conglomerate companies (ie pull out just the gaming division of Microsoft) to compare but not all the necessary information is always disclosed.
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