this is a short description from a job IB position “knowledge of different valuation methodologies (including statutory discounted cash flow analysis, comparable company analysis, precedent transactions analysis, sum of parts analysis, regression-based analysis and “runoff” analysis)” What is regression-based analysis and runoff analysis?
runnoff - could that be a different name for a break-up valuation (which is different from a sum of the parts)… regression based…not sure.
is this by anychance a technology focused IB job? in a runoff scenario, basically you estimate that a certain percent of the company’s revenue will attrite each year (no growth) and you associate a certain leve of expenses that the company will incure in maintaining thoe expenses. you then calculate a free cash flow number based on your assumptions and then discount them back at the appropriate cost of equity. runoff analysis is very popular in tech focused lending / banking and is also popular way of analyzing transaction processors.
I’m not sure, but my guess is that it involves regressing some valuation multiple on key drivers (i.e profitability, capital expenditures, expected growth, etc…) for some cohort of comparable companies. Then you use the estimated coefficients from this regression to predict the multiple for the firm under consideration.