Comparables

Comparables, in valuation and benchmarking, refer to using similar items or entities as benchmarks to estimate value, performance, or characteristics of a subject. The concept is applied across disciplines, notably in real estate and finance, where market data from similar cases informs a valuation or decision.

In real estate appraisal, comparables (comps) are recently sold properties in the same area that resemble the subject in key attributes such as size, layout, age, condition, and features. The sale prices of these comps help establish an estimated market value or listing price for the subject. In corporate finance, comparable company analysis (often called comps) identifies publicly traded firms with similar industry, size, and growth characteristics, then applies valuation multiples (for example EV/EBITDA, P/E) to infer the subject’s value.

Selection and adjustment are central to the method. Analysts choose comparables that mirror the subject’s main value drivers and apply adjustments for remaining differences in location, time of sale, quality, or terms to achieve comparability. Data sources may include multiple listing services, public records, company filings, or financial databases.

Advantages of comparables include their market-based, transparent framework and their usefulness as a quick cross-check or anchor. Limitations involve subjectivity in selecting and adjusting comps, limited availability of truly similar cases, and evolving market conditions that can distort comparisons. In practice, comparables often yield a valuation range rather than a single figure and are typically used alongside more formal methods.