Comparable Company Analysis (CCA) is a financial valuation method used to evaluate a company's worth by comparing it to similar businesses in the same industry. Analysts look at key metrics such as revenue, earnings, and market capitalization to identify trends and benchmarks. This helps investors understand how a company performs relative to its peers.
The process involves selecting a group of peer companies that share similar characteristics, such as size and market focus. By analyzing these companies' financial ratios, like Price-to-Earnings (P/E) and Enterprise Value-to-EBITDA, analysts can estimate a fair value for the company in question.