Comparable Companies: If It Ain’t Broke, Don’t Fix It

The Michel-Shaked Group’s Professor Israel Shaked and Luka Miladinovic, CFA, published an article titled “Comparable Companies: If It Ain’t Broke, Don’t Fix It,” in the July 2025 issue of the American Bankruptcy Institute Journal. The article discusses the continued applicability and proper execution of the Comparable Companies (“CompCo”) valuation methodology. Using the Chesapeake Energy bankruptcy case as a central example, the authors describe how a disciplined CompCo approach can remain relevant in dynamic market environments.

The CompCo analysis is a market-based valuation methodology that estimates the value of a subject company by comparing it to a set of peer companies. While the methodology is widely accepted, its effectiveness relies heavily on the careful selection of comparable companies, proper benchmarking, and the thoughtful selection of valuation multiples. In particular, where applicable, the authors highlight the importance of using industry-specific metrics, selecting valuation data that reflects the current state of both the subject company and its comparable companies, and avoiding exclusive reliance on historical multiples in unusual or volatile market environments.

The article provides guidance on how to structure a CompCo analysis, including the assessment of operational comparability, selection of the appropriate valuation multiple (e.g., EV/EBITDAX), and transitioning from enterprise value to equity value. Additionally, the authors caution against common missteps such as double-counting and overreliance on absolute financial metrics instead of relative performance indicators. Through this discussion, the article reinforces the idea that, despite market trends and valuation fads, a properly executed CompCo analysis remains a robust and defensible approach to determining company value.

A full version of this article can be seen here.