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On a valuation basis, ValueClick is the better value of the two, trading at under 12 times 2006 EBITDA compared with about 23 times for aQuantive and about 20 times for the ad services sector.
In essence, they're a bit like earnings yields, where the REITs' net operating income (EBITDA, essentially) is divided by the enterprise value of the REIT.
He estimates the 12-month fair value of the stock at $53 a share, based on 8.5 times enterprise value/EBITDA.
Moreover, also the effectiveness of the EBITDA-based IDR is studied.
Each piece of the whole is valued at a multiple of either operating income (in the Ebitda sense) or sales, using multiples typical for the industry in question.
As a percentage of sales, the EBITDA was 17.2%.
But the biggest selling point for Comcast now is how low the bar of expectations is with shares trading at an enterprise value of just 7.9 times EBITDA.
The key components of a comparable company analysis are the Debtor's EBITDA (i.e., earnings before interest, taxes, depreciation and amortization) and the selection of an appropriate multiple to apply to the EBITDA to arrive at enterprise value.
The share price of the Italian shoemaker Tod's equates to an enterprise value of about 13.2 times historic Ebitda.
Back to The Ebitda Folly.
A company with a net equity value of over $500 million and an EBITDA of $120 million is not exactly a candidate for bankruptcy--by anyone's definition.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com