(Source: company investor presentation) The basics The first step to running a comps table is to select a group of similar companies with similar market caps, life cycles, and geographic and revenue segments. This is arguably the most important step of the model, as differing companies will defeat the purpose of a "comparable" approach, and you will not be able to derive an implied price for the shares (more on this later). The second step in building the comps model is to select the appropriate metrics to compare your firm against its peers. While the P/E ratio is nice, remember that it's not the one-size-fits-all ratio that should be used for every company under the sun, especially for those with little or no earnings; for example, a young growth stock with no earnings stream, such as Canopy Growth Corp. (TSX:CGC), would typically be valued with the enterprise-value-to-sales multiple. Therefore, learning the industry-standard multiples will greatly enhance your valuation skills.