What is recommended when collecting peer financials in the comps process?

When collecting peer financials in the comparables (comps) process, it is crucial to scrub financials for non-recurring items. This means adjusting the financial data to eliminate any one-time events or irregularities that do not reflect the ongoing operational performance of the companies being compared. Non-recurring items can distort the evaluation of financial health and profitability, leading to misleading conclusions when making comparisons.

By ensuring that the financials are adjusted to exclude these items, analysts can achieve a more accurate and comparable representation of the peers' core earnings and financial metrics. This helps in making informed investment decisions or valuations, as the data reflects a more normalized view of performance.

The approach of focusing solely on earnings reports may overlook other important financial statements and metrics that contribute to a comprehensive analysis. Similarly, withholding detailed historical data would hinder an analyst's ability to establish patterns or trends necessary for sound comparisons. Finally, ensuring each peer has the same revenue model could be relevant but is not as critical as the necessity to present a clear view of ongoing operational performance by scrubbing for non-recurring items.