How do you factor in a competitive advantage or disadvantage to a company’s valuation?

You should never be taking the straight median of your valuation range and just roll with that. Factors like profitability, growth and a competitive advantage or disadvantage should always be taken into account after finding a preliminary valuation range. It’s an art not a science.

For example, a company might have growth that is 2.0x faster than their peers, but profitability might only be 0.5x of their peers, and their implementation might be less effective than their peers. For me, I would set their range at the 60th - 70th percentile of the comps range. I would do this because profitability can be reached with scale and implementation is something an acquirer can fix so it comes out to a net positive.

Every valuation has 10x more considerations than the above and takes a lot of critical thinking to refine. Also - that example is secret sauce, if you can drop that blurb or a variation of it, you will be the only candidate to do so.