1.) Compute a valuation for Cedar Fair (FUN) based on the comparable firms. The
ID: 2751618 • Letter: 1
Question
1.) Compute a valuation for Cedar Fair (FUN) based on the comparable firms. The two comparible firms I am using are SEAS and SIX. It can be any type of valuation, I just need help in setting one up with any of the following information. Sorry for the vaugue directions but this was all I was given. The titles at the top should all be shifted 1 spot over so FUN market cap= 3.06B and SEAS is 1.59B.
FUN SEAS PVT1 SIX Industry Market Cap: 3.06B 1.59B N/A 4.88B 428.68M Employees: 2,000 5,000 N/A 1,900 1.90K Qtrly Rev Growth (yoy): 0.08 0.00 N/A 0.06 0.19 Revenue (ttm): 1.23B 1.37B N/A 1.23B 402.42M Gross Margin (ttm): 0.50 0.40 N/A 0.55 0.50 EBITDA (ttm): 447.66M 340.43M N/A 416.18M 1.15M Operating Margin (ttm): 0.26 0.12 N/A 0.25 -0.15 Net Income (ttm): 119.85M 34.72M N/A 117.84M N/A EPS (ttm): 2.13 0.40 N/A 1.21 N/A P/E (ttm): 25.62 44.25 N/A 44.04 26.77 PEG (5 yr expected): 0.93 1.27 N/A 2.70 0.97 P/S (ttm): 2.51 1.11 N/A 3.96 1.61Explanation / Answer
We will first calculate the Market cap to EBITDA ratio for the two comparable companies.
For SEAS = $1,590,000,000 / $340,430,000 = 4.67 times
For SIX = $4,880,000,000 / $416,180,000 = 11.73 times
Weighted average for above two = {(4.67*159) + (11.73 * 488)} / (159 + 488) = 6466.77 / 647 = 10 times
Taking this ratio as base,
Market value of Cedar Fair (FUN) = $447,660,000 * 10 times = $4,476,600,000 = $4.48 billion
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