What is one of the main advantages of using Public Comps for valuation?

One of the main advantages of using Public Comps for valuation is that it utilizes real market data for assessments. This method involves analyzing the valuations of publicly traded companies that are similar in terms of industry, size, and other characteristics. By using actual market prices, analysts gain insights into how the market values these comparable companies, which can provide a clearer and more current perspective on a company's own valuation.

The reliance on real market data ensures that the valuation reflects the current economic conditions and market sentiment, making it a relevant and timely approach. Public Comps can yield multiple valuation metrics, such as Price-to-Earnings (P/E) and Enterprise Value-to-EBITDA (EV/EBITDA), which can be directly compared to the company in question, offering a practical basis for assessment. This tangible basis is a significant benefit over methods that rely on theoretical modeling or projections, as it grounds the valuation in observable market behavior.