sdl valuation, page-8

Hi (Pencilin),

DCF is the most used tool for stock valuation to estimate the attractiveness of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one.

Most brokers used DCF valuation, including the ones who did for SDL.

The EV is just a quick approach to see how much is worth the stock.

http://www.investopedia.com/terms/d/dcf.asp

Cheers,
BS