Triangulation

Triangulation is frequently described as if it meant averaging several methods, and it does not. The point is independence. If a relative method built from market prices and an intrinsic method built from forecast cash flows land in the same place, that agreement is informative, because two unrelated routes reached the same answer. If they agree because the same assumption was fed into both, the agreement is manufactured and tells you nothing.

The most common way this goes wrong is quiet rather than deliberate. A discounted cash flow whose terminal value is set by applying the peer multiple, cross checked against the peer multiple, will always agree with the comparables. It looks like corroboration and is really one method reported twice.

It follows that a genuine disagreement is worth more than a comfortable consensus. Where the methods diverge, the divergence has a cause, and finding it is usually the most valuable analysis in the whole exercise: an assumption out of line with what the market is pricing, a peer set that is not really comparable, or a set of transactions struck under conditions that no longer hold.

In presentation terms this means the conclusion should say which methods support it and which do not, rather than resolving the tension into a single average. An audience that has seen a few of these pages trusts a stated disagreement considerably more than a page where everything mysteriously lines up.