Valuation Calculator Skill

Purpose

Calculate comprehensive fair value for public companies using multiple CFA-curriculum-aligned
valuation methodologies. This skill combines Bloomberg Terminal data (provided by user via
screenshots), SEC filings, and institutional-grade models to produce a multi-method valuation
with scenario analysis.

When to Use

Activate when the user:

• Provides Bloomberg Terminal financial data (screenshot or text) and asks for valuation
• Asks to calculate fair value, intrinsic value, or target price for a public company
• Wants DCF, multiples-based, or comparable company analysis
• Needs a comprehensive valuation report for an investment thesis

Supporting Files

Load these reference files during analysis:

• valuation-models.md — Complete CFA-aligned formula reference (DDM, DCF, RI, multiples)
• sec-filing-guide.md — SEC EDGAR data retrieval and parsing instructions
• industry-multiples.md — Sector-specific benchmark multiples and peer selection

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VALUATION WORKFLOW

Phase 1: Data Collection

1.1 Parse User-Provided Bloomberg Data

Extract these metrics from the user's screenshot or text input. Record the currency
(usually USD) and whether figures are in millions or billions.

Market Data:

• Current market capitalization
• Current stock price
• Shares outstanding (basic and diluted)
• Enterprise Value (EV = Market Cap + Total Debt - Cash)

Income Statement (historical + consensus estimates):

• Total Revenue and YoY growth rate
• Gross Profit and Gross Margin %
• EBITDA and EBITDA Margin %
• EBIT (Operating Income)
• Net Income (adjusted and GAAP)
• Basic EPS and Adjusted EPS
• EPS YoY growth rate

Cash Flow:

• Operating Cash Flow (CFO)
• Capital Expenditures (CapEx)
• Free Cash Flow (FCF = CFO - CapEx)
• FCF Margin %
• Unlevered Free Cash Flow (UFCF)
• Cash Flow Per Share

Balance Sheet:

• Cash and Short-term Investments
• Total Debt (short-term + long-term)
• Net Debt
• Total Equity (Book Value)
• Book Value Per Share

Existing Multiples (from Bloomberg):

• Trailing P/E and Forward P/E
• EV/EBITDA
• P/B (Price-to-Book)
• P/S (Price-to-Sales)
• P/CF (Price-to-Cash-Flow)
• Price/FCF
• PEG Ratio
• Dividend Yield

Historical Multiples (if available):

• 5Y and 10Y average P/E
• Historical P/E range (min, mean+1SD, mean, mean-1SD, max)

Consensus Estimates (forward years):

• Revenue estimates (current year, next year, year after)
• EPS estimates (current year, next year, year after)
• EBITDA estimates
• Analyst count and estimate dispersion

Profitability Metrics:

• Return on Equity (ROE)
• Return on Invested Capital (ROIC)
• Return on Assets (ROA)

If any critical data is missing, note it and use SEC filings to fill gaps.

1.2 Fetch SEC EDGAR Data

Follow the instructions in sec-filing-guide.md to retrieve financial statements.

Required Filings:

• Latest 10-K (annual report) — full-year financials
• Latest 10-Q (quarterly) — most recent quarter
• Proxy Statement (DEF 14A) — compensation, insider ownership

Data to Extract:

• 3-5 years of Income Statement data
• 3-5 years of Balance Sheet data
• 3-5 years of Cash Flow Statement data
• Segment revenue breakdown (for SOTP)
• Debt maturity schedule
• Share repurchase activity
• Capital expenditure guidance

1.3 Calculate Derived Metrics

From raw data, compute:

Sustainable Growth Rate:
  g = ROE * (1 - Payout Ratio)

DuPont Decomposition:
  ROE = Net Profit Margin * Asset Turnover * Equity Multiplier
  ROE = (NI/Sales) * (Sales/Assets) * (Assets/Equity)

Extended DuPont (5-factor):
  ROE = EBIT Margin * Interest Burden * Tax Burden * Asset Turnover * Equity Multiplier

NOPAT:
  NOPAT = EBIT * (1 - Tax Rate)

Invested Capital:
  IC = Total Equity + Total Debt - Cash

ROIC:
  ROIC = NOPAT / Invested Capital

Implied EPS Growth:
  From consensus estimates for next 2-3 years

Revenue CAGR:
  CAGR = (Revenue_end / Revenue_start)^(1/n) - 1

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Phase 1b: Market Pricing Mechanism Pre-Check

Before running valuation models, reverse-engineer how the market actually prices this stock:

Step 1: Identify the market's current pricing method
  - What multiple does the stock trade most closely to? (P/E, EV/EBITDA, P/S, P/B)
  - Evidence: which metric best explains stock price movements around earnings?
  - Sell-side consensus: what methodology do most analysts use?

Step 2: Identify hidden assumptions in current price
  - What revenue growth rate is implied by current multiples?
  - What margin trajectory is priced in?
  - What terminal state does the market assume?

Step 3: Align valuation model selection with market reality
  - If market prices on P/S (growth company): lead with relative valuation, DCF secondary
  - If market prices on P/E (mature company): lead with earnings-based models
  - If market prices on P/B (financial/asset-heavy): lead with residual income
  - If market prices on EV/EBITDA (levered/capital-intensive): lead with EBITDA-based models
  - Run all applicable models regardless, but WEIGHT the output toward the market's method

This step ensures valuation output is RELEVANT to how the stock actually trades, not just academically correct.

Phase 2: Valuation Engine

Run ALL applicable models. Skip models that are inappropriate for the company type
(e.g., skip DDM for non-dividend payers, skip P/E for negative-earnings companies).

2.1 Relative Valuation (Multiples-Based)

For each multiple, calculate THREE implied values:

Multiple	Formula	Best For
Trailing P/E	Current Price / LTM EPS	Profitable, stable earnings
Forward P/E	Current Price / NTY EPS estimate	Growth companies
EV/EBITDA	Enterprise Value / LTM EBITDA	Capital-intensive, leveraged
P/S	Market Cap / LTM Revenue	Unprofitable or high-growth
EV/Revenue	Enterprise Value / LTM Revenue	Pre-profit comparison
P/B	Market Cap / Book Value	Asset-heavy (banks, semis)
P/FCF	Market Cap / LTM Free Cash Flow	Cash-generative
P/CF	Market Cap / Operating Cash Flow	All companies with positive CFO
PEG	Forward P/E / EPS Growth Rate	Growth-at-reasonable-price

For each multiple, derive fair value using three benchmarks:

1. Historical Average: Company's own 5Y or 10Y average multiple

   Fair Value = Current Metric * Historical Average Multiple
   Per Share = Fair Value / Shares Outstanding

2. Sector Median: Industry median multiple from industry-multiples.md

   Fair Value = Current Metric * Sector Median Multiple

3. Peer Group: Median of 3-5 closest comparable companies

   Fair Value = Current Metric * Peer Median Multiple

PEG Analysis (per TER report pattern):

PEG Ratio = Forward P/E / Expected EPS Growth Rate (%)
Fair PEG = 1.0 (growth equals multiple)
Overvalued if PEG > 1.0, Undervalued if PEG < 1.0
Implied Fair P/E = EPS Growth Rate * Fair PEG
Implied Fair Price = Implied Fair P/E * Forward EPS

EPS Growth x Historical PE Method (per TER report pattern):

Step 1: Take Forward EPS estimate for Year+2 or Year+3
Step 2: Multiply by 10Y average P/E
Step 3: Result = Fair value based on normalized earnings power
Example (TER): FY27 EPS ~$8.34 * 29x avg PE = ~$242 fair value

2.2 Discounted Cash Flow (DCF) Valuation

Run BOTH FCFF and FCFE models when data permits.

FCFF Model (Firm Value):

Step 1: Calculate Historical FCFF
  FCFF = EBIT * (1 - Tax Rate) + D&A - CapEx - Change in NWC
  Alternative: FCFF = CFO + Interest * (1 - Tax Rate) - CapEx

Step 2: Project FCFF for 5-10 years
  Use revenue growth rates from consensus + margin assumptions
  Stage 1 (Years 1-3): High growth phase — use analyst estimates
  Stage 2 (Years 4-7): Transition — linearly decline to terminal rate
  Stage 3 (Terminal): Stable growth at GDP rate (2-3%)

Step 3: Calculate WACC
  Cost of Equity: re = Rf + Beta * (Rm - Rf)
    Rf = 10-year US Treasury yield (current)
    Beta = Company beta (from Bloomberg or regression)
    Rm - Rf = Equity risk premium (5.0-6.0% typical)
    Adjusted Beta = 0.33 + 0.67 * Raw Beta

  Cost of Debt: rd = Interest Expense / Average Total Debt
    After-tax: rd * (1 - Tax Rate)

  Weights: Use market values
    E = Market Cap
    D = Market Value of Debt (approximate with book value)
    WACC = (E/(E+D)) * re + (D/(E+D)) * rd * (1 - Tax Rate)

Step 4: Calculate Terminal Value (TWO methods)
  Method A — Perpetual Growth:
    TV = FCFF_terminal * (1 + g) / (WACC - g)
    where g = long-term growth rate (2-3%)

  Method B — Exit Multiple:
    TV = Terminal Year EBITDA * Exit EV/EBITDA Multiple
    Use sector median or company historical average

Step 5: Discount to Present Value
  Firm Value = Sum of PV(FCFF) + PV(Terminal Value)
  Equity Value = Firm Value - Net Debt
  Per Share Value = Equity Value / Diluted Shares Outstanding

FCFE Model (Equity Value Directly):

FCFE = Net Income + D&A - CapEx - Change in NWC + Net Borrowing
Alternative: FCFE = CFO - CapEx + Net Borrowing

Discount at Cost of Equity (re), not WACC
Equity Value = Sum of PV(FCFE) + PV(Terminal Value of Equity)
Per Share = Equity Value / Diluted Shares

DCF Sensitivity Table:
Create a matrix varying:

• Rows: WACC (base -1%, base -0.5%, base, base +0.5%, base +1%)
• Columns: Terminal growth (1.5%, 2.0%, 2.5%, 3.0%, 3.5%)
• Cell values: Implied per-share fair value

2.3 Sum-of-the-Parts (SOTP) Valuation

Use when company has distinct business segments, geographic entities, or subsidiaries with different growth profiles, risk characteristics, or applicable valuation methodologies.

Standard Segment SOTP:

Step 1: Identify segments from SEC filings or Bloomberg
Step 2: For each segment:
  - Determine revenue and/or EBITDA
  - Select appropriate peer multiple (from industry-multiples.md)
  - Calculate segment value = Metric * Appropriate Multiple
Step 3: Sum all segment values
Step 4: Add: Net cash (or subtract net debt)
Step 5: Subtract: Minority interests, preferred equity
Step 6: Divide by diluted shares = Per share SOTP value

Run three scenarios:
  Conservative: Low-end multiples for each segment
  Base: Median multiples
  Optimistic: High-end multiples

Geographic/Entity SOTP (for cross-border companies):
When a company has publicly listed subsidiaries or operations in different jurisdictions:

Step 1: Identify entities (e.g., parent vs listed subsidiary, US vs international operations)
Step 2: For listed subsidiaries:
  - Use market cap as starting point
  - Apply ownership percentage: Parent's share = Subsidiary Market Cap * Ownership %
  - Apply geographic/political risk discount if warranted (e.g., 20-40% for China-listed subs)
Step 3: For non-listed segments:
  - Estimate revenue allocation by geography (from 10-K geographic disclosures)
  - Apply region-appropriate peer multiples
Step 4: Sum all entity values
Step 5: Apply conglomerate discount if appropriate (typically 10-20%)

Per-Unit SOTP (for capacity-based businesses):
When a company's value can be anchored to physical capacity or assets:

Step 1: Identify per-unit valuation anchors from comparable transactions:
  - EV/MW (power generation, data centers): Use recent M&A transactions as benchmarks
  - EV/GW (semiconductor capacity, solar manufacturing)
  - EV/subscriber or EV/user (platform businesses)
  - EV/store or EV/location (retail, healthcare facilities)
  - EV/boe or EV/oz (oil & gas, mining reserves)

Step 2: Apply per-unit value to company's capacity:
  Segment Value = Company Units * Per-Unit Value from Comparable Transaction

Step 3: Apply discount for:
  - Contracted vs uncontracted capacity (e.g., 40-60% discount for uncontracted)
  - Operational vs under-construction (e.g., 30-50% discount for under-construction)
  - Customer quality gap vs comparable (e.g., comparable had hyperscaler contracts)

Example (data center):
  AirTrunk acquisition: $161B for 1.8GW = ~$89.5B/GW
  Company has 0.66GW operational = 0.66 * $89.5B = ~$59B implied
  Apply 40% discount (no comparable customer contracts) = ~$35B

2.4 Comparable Transaction Analysis

Use recent M&A transactions involving similar companies to derive valuation benchmarks.

Step 1: Identify 3-5 recent transactions (last 3 years) in the same sector
Step 2: For each transaction, calculate:
  - EV/Revenue at acquisition
  - EV/EBITDA at acquisition
  - EV/per-unit metric (MW, GW, subscriber, etc.)
  - Premium paid over pre-announcement price

Step 3: Build comparison table:
  | Transaction | Date | EV ($B) | EV/Rev | EV/EBITDA | EV/Unit | Premium |
  |-------------|------|---------|--------|-----------|---------|---------|

Step 4: Apply median transaction multiples to target company
Step 5: Adjust for size, growth rate, and profitability differences

2.5 Bottom-Up Capacity-to-EBITDA Projection

For companies undergoing rapid capacity expansion (manufacturing, data centers, power generation, mining):

Step 1: Establish current capacity and utilization
  Current capacity: [XX] units (MW, GW, EH/s, etc.)
  Current utilization: [XX]%
  Current EBITDA from this segment: $[XX]M

Step 2: Map disclosed capacity expansion timeline
  | Quarter | Incremental Capacity | Cumulative | Source |
  |---------|---------------------|------------|--------|
  | Q1 2026 | +XX units           | XX total   | Mgmt guidance |
  | Q2 2026 | +XX units           | XX total   | Contract disclosure |
  | ...     | ...                 | ...        | ... |

Step 3: Calculate EBITDA at full capacity
  Growth multiple = Future Capacity / Current Capacity
  Future EBITDA = Current Segment EBITDA * Growth Multiple
  (Adjusted for: utilization ramp, pricing changes, operating leverage)

Step 4: Apply appropriate multiple to future EBITDA
  Fair Value = Future EBITDA * Target EV/EBITDA Multiple
  Discount to present if >2 years forward (use WACC)

2.6 Davis Double Play Analysis

When both earnings growth AND multiple expansion could occur simultaneously:

Step 1: EPS Trajectory
  Current EPS: $[XX]
  Forward 2Y EPS (consensus): $[XX]
  EPS Growth: [XX]%

Step 2: Multiple Trajectory
  Current P/E: [XX]x
  Historical average P/E (10Y): [XX]x
  Sector median P/E: [XX]x
  "Normalized" P/E (post rate-cut environment): [XX]x

Step 3: Davis Double Play Calculation
  If EPS grows from $A to $B and P/E expands from Xx to Yx:
  Target Price = $B * Yx
  Total Return = (Target Price / Current Price - 1)
  Decomposition: [XX]% from EPS growth + [XX]% from PE expansion

Step 4: Davis Double Kill (downside scenario)
  If EPS disappoints (bear case) and P/E contracts (risk-off):
  Bear Price = Bear EPS * Trough P/E

2.7 NAD Price Decomposition (Price Floor Analysis)

Decompose the current stock price into mutually exclusive "floors" — value layers that different investor types are paying for, each with specific evidence, reliability, and collapse conditions. This is NOT a valuation model — it is a reverse-engineering of what the market is currently paying for.

Step 1: Identify the Pricing Bridge
  Current Price = Floor 1 + Floor 2 + Floor 3 + ... - Discount Floor(s)
  Must approximately sum to current price (±15%)

Step 2: Define 2-4 Positive Floors + ≥1 Negative Floor

  For each floor, specify:
  | Field | Required |
  |-------|----------|
  | Floor Name | Descriptive label (e.g., "Core Business Value", "AI Growth Premium") |
  | Implied Value | Dollar amount per share |
  | Evidence | What supports this floor |
  | Reliability | High / Medium / Low |
  | Observation Signal | What to watch for changes |
  | Collapse Condition | What specific event/data breaks this floor |
  | Who Pays | Which investor type supports this layer |

Step 3: Map Downside Path
  - Which floor breaks first? (usually the most narrative-driven floor)
  - If it breaks, what price range results?
  - Which floor breaks next? (cascade analysis)

Step 4: Map Upside Path
  - Which floor thickens first? (usually the floor with nearest catalyst)
  - If it thickens, what price range results?
  - What would add a new floor? (new growth vector, M&A, etc.)

Floor Types (common patterns):

• Foundation Floor: Balance sheet value, net cash, liquidation value
• Core Business Floor: Stable earnings power at normalized multiples
• Growth/Narrative Floor: Premium for expected growth above market rate
• Option Value Floor: Upside from new products, markets, or transformations
• Discount Floor (negative): Historical credibility issues, governance risk, policy risk

Common Mistakes:

• Floors that overlap (same value counted twice)
• No negative floor (every stock has discount factors)
• Bridge doesn't sum to approximately current price
• Floors defined as valuation methods rather than value layers

Example (simplified):

Current Price: $69
Floor 1 (Core Brokerage): $25 — stable transaction + NII revenue at peer multiples
Floor 2 (Growth Premium): $20 — 52% revenue growth commanding above-peer P/E
Floor 3 (Platform Optionality): $18 — crypto, prediction markets, international
Floor 4 (Narrative/AI): $10 — AI-driven platform story, Gold flywheel
Discount Floor: -$4 — MAU decline, crypto volatility, regulatory history
Bridge: $25 + $20 + $18 + $10 - $4 = $69 ✓

2.9 Residual Income Valuation

Best for financial companies and asset-heavy businesses.

RI = Net Income - (Cost of Equity * Beginning Book Value)
   = (ROE - re) * Beginning Book Value

Single-Stage Model:
  V = Book Value + RI_1 / (re - g)

Multi-Stage:
  V = Book Value + Sum of PV(RI_t) for explicit period + PV(Terminal RI)

Justified P/B from RI:
  P/B = 1 + (ROE - re) / (re - g)
  If ROE > re: P/B > 1 (value creation)
  If ROE < re: P/B < 1 (value destruction)

2.10 Dividend Discount Model (DDM)

Only for companies with consistent dividend payments.

Gordon Growth: V = D1 / (re - g)
  where D1 = D0 * (1 + g), g = sustainable growth rate

Two-Stage DDM:
  V = Sum[D0*(1+g1)^t / (1+re)^t] for t=1 to n
    + [Dn+1 / (re - g2)] * [1 / (1+re)^n]

H-Model (linearly declining growth):
  V = D0*(1+gL)/(re-gL) + D0*H*(gS-gL)/(re-gL)
  where H = half-life of high-growth period

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Phase 3: Scenario Analysis

3.1 Define Scenarios

Bull Case (default 25% — adjust based on context):

• Revenue growth at high end of analyst range or above
• Margin expansion (operating leverage, mix shift)
• Multiple expansion (sector re-rating, catalyst)
• Apply highest reasonable multiples from peer/historical range

Base Case (default 50% — adjust based on context):

• Revenue growth at consensus median
• Margins stable or per management guidance
• Multiples at historical average or sector median

Bear Case (default 25% — adjust based on context):

• Revenue growth at low end or miss
• Margin compression (competition, cost inflation)
• Multiple contraction (macro headwinds, sector rotation)
• Apply lowest reasonable multiples

Probability Adjustment Guidelines:

• Default weights (25/50/25) may be adjusted when evidence supports asymmetry
• For turnaround stories with high uncertainty: consider 30/40/30
• For high-conviction catalysts with clear timeline: consider 20/50/30 or 15/55/30
• For speculative/pre-revenue companies: consider 20/30/50 (heavier bear weight)
• Always state the rationale for any non-default probability weights

3.2 Calculate Probability-Weighted Fair Value

Weighted Fair Value = (Bull Price * Bull Prob)
                    + (Base Price * Base Prob)
                    + (Bear Price * Bear Prob)

Upside/Downside from Current Price:
  Upside = (Weighted Fair Value / Current Price - 1) * 100%

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Phase 4: Comparable Company Analysis

4.1 Peer Selection

Select 3-5 peers based on:

• Same industry / sub-sector
• Similar market cap range (0.5x to 2x target)
• Similar business model and revenue mix
• Similar growth profile

4.2 Comparison Table

Build a comparison table with these columns:

Metric	Target	Peer 1	Peer 2	Peer 3	Median
Market Cap
Revenue
Revenue Growth %
Gross Margin %
EBITDA Margin %
Net Margin %
Forward P/E
EV/EBITDA
P/S
P/FCF
PEG
ROE %
ROIC %
Net Debt/EBITDA

4.3 Premium/Discount Analysis

For each multiple:
  Target Premium = (Target Multiple / Peer Median - 1) * 100%
  If premium > 0: Company trades at premium — assess if justified by growth/quality
  If premium < 0: Company trades at discount — assess if undervalued or deserved

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Phase 5: Output Report

Generate the valuation report in this exact structure:

================================================================
VALUATION REPORT: [TICKER] — [COMPANY NAME]
Date: [Current Date]
Current Price: $[XX.XX] | Market Cap: $[XX.X]B
================================================================

1. EXECUTIVE SUMMARY
   - Fair Value Range: $[Low] — $[High]
   - Base Case Fair Value: $[XX.XX]
   - Probability-Weighted Fair Value: $[XX.XX]
   - Upside/Downside: [+/-XX%] from current price
   - Valuation Verdict: [Undervalued / Fairly Valued / Overvalued]

2. VALUATION SUMMARY TABLE

   | Model                  | Fair Value/Share | vs Current |
   |------------------------|-----------------|------------|
   | DCF (FCFF) — Base      | $XX.XX          | +/-XX%     |
   | DCF (FCFE) — Base      | $XX.XX          | +/-XX%     |
   | Forward P/E (hist avg) | $XX.XX          | +/-XX%     |
   | Forward P/E (sector)   | $XX.XX          | +/-XX%     |
   | EV/EBITDA (hist avg)   | $XX.XX          | +/-XX%     |
   | P/S (sector)           | $XX.XX          | +/-XX%     |
   | P/FCF                  | $XX.XX          | +/-XX%     |
   | PEG-implied            | $XX.XX          | +/-XX%     |
   | EPS x Hist PE          | $XX.XX          | +/-XX%     |
   | SOTP (if applicable)   | $XX.XX          | +/-XX%     |
   | Residual Income        | $XX.XX          | +/-XX%     |
   | NAD Floor Analysis     | See breakdown   | See floors |
   | **Median of All**      | **$XX.XX**      | **+/-XX%** |

3. SCENARIO ANALYSIS

   | Scenario | Probability | Fair Value | Upside/Down |
   |----------|-------------|------------|-------------|
   | Bull     | XX%         | $XX.XX     | +XX%        |
   | Base     | XX%         | $XX.XX     | +/-XX%      |
   | Bear     | XX%         | $XX.XX     | -XX%        |
   | Weighted |             | $XX.XX     | +/-XX%      |

4. DCF MODEL DETAILS
   - Key Assumptions: Revenue growth, margins, WACC, terminal growth
   - Projected cash flows table (5-10 years)
   - Terminal value calculation (both methods)
   - Sensitivity table (WACC vs growth)

5. MULTIPLES ANALYSIS
   - Current vs historical vs sector for each multiple
   - Premium/discount assessment

6. COMPARABLE COMPANY TABLE
   - Full peer comparison matrix

7. KEY RISKS TO VALUATION
   - Upside risks (catalysts that could push value higher)
   - Downside risks (factors that could impair value)

8. POSITION SIZING GUIDANCE
   - Based on conviction and risk/reward:
     High conviction (>30% upside, strong catalyst): 10-15%
     Medium conviction (15-30% upside): 5-10%
     Speculative (<15% upside or high uncertainty): 2-5%
================================================================

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MODEL SELECTION LOGIC

Apply these rules to determine which models to run:

IF company pays dividends consistently:
  RUN DDM (Gordon Growth or Two-Stage)

IF company has positive earnings:
  RUN P/E analysis (trailing + forward)
  RUN PEG analysis
  RUN EPS x Historical PE method

IF company has positive EBITDA:
  RUN EV/EBITDA analysis
  RUN DCF (FCFF) model

IF company has positive free cash flow:
  RUN P/FCF analysis
  RUN DCF (FCFE) model

IF company is pre-revenue or pre-profit:
  RUN P/S or EV/Revenue only
  RUN backlog-based valuation if applicable
  NOTE: High uncertainty — widen scenario ranges

IF company has multiple distinct segments:
  RUN SOTP valuation

IF company is asset-heavy or financial:
  RUN Residual Income model
  RUN P/B analysis

ALWAYS RUN:
  - At least one multiples-based method
  - Comparable company analysis
  - Scenario analysis (bull/base/bear)

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SPECIAL CONSIDERATIONS BY SECTOR

Semiconductors / Hardware (TER, AEHR, TowerSemi)

• Use P/E and EV/EBITDA as primary multiples
• Cyclicality adjustment: use mid-cycle earnings for P/E
• Test intensity / TAM analysis for growth projections
• Customer concentration risk assessment

Fintech / Financial Services (GDOT, DAVE, PGY, SOFI)

• Use P/S for high-growth phase, P/E once profitable
• For banks: P/B and Residual Income are primary
• Loan loss provisions and credit quality assessment
• Regulatory risk premium in discount rate

Clean Energy / Solar (CSIQ, FCEL, T1Energy)

• SOTP is critical (multiple business lines)
• Policy/subsidy sensitivity analysis
• Use EV/Revenue or P/S (many unprofitable)
• Balance sheet leverage matters significantly

Mining / Resources (UAMY, UUUU)

• Use P/E at mid-cycle commodity prices
• NAV (Net Asset Value) based on reserves
• Commodity price sensitivity table
• EV/EBITDA with commodity price scenarios

Pre-Revenue / Early-Stage (ACHR, ASTS)

• Backlog-based valuation (total orders * probability of conversion)
• Comparable transaction multiples
• TAM penetration analysis
• Heavy scenario weighting — bear case may be near-zero

Technology / SaaS / Platform (IREN, INOD, COMM)

• P/S and EV/Revenue primary for high-growth
• Rule of 40 check (Revenue Growth % + EBITDA Margin % >= 40)
• Transition to P/E as profitability emerges
• Recurring revenue premium

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DATA QUALITY CHECKS

Before running models, verify:

1. Consistency: Revenue in income statement matches cash flow statement
2. Share count: Diluted shares used for per-share calculations
3. Currency: All figures in same currency
4. Time alignment: LTM vs fiscal year vs calendar year
5. Adjustments: Identify and handle one-time items (restructuring, impairments)
6. Negative values: Cannot use P/E if EPS < 0; cannot use P/FCF if FCF < 0
7. Extreme multiples: Flag if any multiple > 100x or < 0x — likely distorted

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OUTPUT LANGUAGE

All output MUST be in English. Financial data labels, commentary, analysis, and
conclusions must be written in English regardless of the source language of input data.