Our Research Approach
We start with the business, build the financial model around its operating drivers, and use that model to frame forecasts, scenarios, valuation, and risk.
The written research and the model develop together.
Editorial Process
How We Build and Maintain Coverage
Each stage connects back to the assumptions in the model, so readers can see what drives the forecast, what could change, and how the valuation is derived.
- 01
Understand the Business
We study the business model, products, customers, competitive position, industry structure, and the operating drivers that matter most.
- 02
Build the Financial Model
We build the model around the company: revenue and segment drivers, margins, operating costs, working capital, capital expenditure, cash flow, balance sheet, financing, and the KPIs that matter.
- 03
Forecast Operating Performance
Forecasts are built from explicit operating assumptions rather than simple historical extrapolation. The model makes those assumptions visible.
- 04
Test Scenarios and Value the Business
We test the assumptions that can change the outcome and use the valuation methods that fit the business, including DCF, trading comparables, transaction benchmarks, asset-based approaches, or other relevant methods.
- 05
Identify Risks
We identify the execution, financial, market, competitive, regulatory, and financing risks that could change the forecast or valuation.
- 06
Keep Coverage Current
After initiation, we update the research around earnings, material developments, and changes that affect the model or valuation.
Research Standards
Analysts Own the Work
Analysts are responsible for the assumptions, forecasts, valuation framework, risk assessment, and final conclusions.
The model, written analysis, and valuation are developed as one integrated research process, with analyst judgment carried through from operating assumptions to the published conclusions.
Valuation Philosophy
Valuation Starts With the Model
We use valuation methods that fit the company and its stage of development. The valuation is tied directly to the assumptions and scenarios in the financial model.
An illustrative valuation is not a price target or an investment recommendation.
AER does not publish conventional Buy, Hold, or Sell ratings. We publish the assumptions, forecasts, valuation, and risks so readers can form their own view.
- Valuation Summary
- The methodology, key assumptions, and valuation output in one view.
- Illustrative Valuation
- The value produced by the stated assumptions and valuation methodology.
- Key Valuation Drivers
- The assumptions and operating variables with the greatest impact on value.
Sponsored Research
One Research Process, Clear Disclosure
Sponsored research follows the same research process as independently initiated coverage, with the commercial relationship clearly disclosed in the report.
See It in Practice
Read the Research
See how the approach comes together in published AER research.