Analyzing Volkswagen’s Value Based on Multiples Valuation Method

Abstract

This paper evaluated the value of Volkswagen Company based on multiples valuation method. The study used P/E and EV/EBITDA ratios as multiples to analyse Volkswagen's stock price and enterprise value. Guided by valuation theory, the author chose several comparable peer firms to Volkswagen, calculated the average multiples, and applied them to Volkswagen's corresponding multipliers. Based on the study result, the author concludes that Volkswagen is undervalued when applying P/E and EV/EBITDA ratios. Although the inherent flaws of the multiples valuation method may make the conclusion of this paper imprecise, this paper aims to provide a reference case for subsequent multiples valuation research. The author believes further research and development of the multiples valuation method will increase the accuracy of this method in evaluating a company's value.