Identifying Comparables and Valuation Using PB and PE Advanced Auto Parts book value per share is $51 18 and its forward earnings estimate per share is $7 90 The following information is also available for Advanced Auto Parts and a peer group of companies from the auto parts sector Ticker Market Cap ($ mil) PB Current Forward PE (FY1) EPS 5 Year Historical Growth Rate ROE (T 4Q) Advanced Auto Parts (AAP) 11,110 3 03 19 71 1 6 11 39 AutoZone (AZO) 28,440 17 89 17 78 5 7 91 32 CarMax (KMX) 14,010 4 06 16 06 11 3 25 44 America's Car Mart (CRMT) 18,920 2 27 12 01 17 6 20 72 Copart Inc (CPRT) 18,920 10 64 31 34 27 1 36 48 O'Reilly Auto Parts (ORLY) 30,520 210 93 22 73 14 6 282 30 US Auto Parts Network (PRTS) 59 1 63 21 30 (20 7) (25 93) Gentex (GNTX) 7,062 3 71 16 55 14 5 22 95 b Assume that you use as comparables the following set of companies KMX, CRMT, and GNTX Estimate Advanced Auto Parts equity intrinsic value per share using the PB ratio from these peer companies Round answer to two decimal places $Answer c Use the same comparables as in part b and estimate Advanced Auto Parts equity intrinsic value per share using the PE ratio from these peer companies Round answer to two decimal places $Answer

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Question: Identifying Comparables and Valuation Using PB and PE Advanced Auto Parts book value per share is $51.18 and its forward earnings estimate per share is

Identifying Comparables and Valuation Using PB and PE

Advanced Auto Parts book value per share is $51.18 and its forward earnings estimate per share is $7.90. The following information is also available for Advanced Auto Parts and a peer group of companies from the auto parts sector.

Ticker	Market Cap ($ mil)	PB Current	Forward PE (FY1)	EPS 5-Year Historical Growth Rate	ROE (T 4Q)
Advanced Auto Parts (AAP)	11,110	3.03	19.71	1.6%	11.39%
AutoZone (AZO)	28,440	17.89	17.78	5.7%	91.32%
CarMax (KMX)	14,010	4.06	16.06	11.3%	25.44%
America's Car-Mart (CRMT)	18,920	2.27	12.01	17.6%	20.72%
Copart Inc. (CPRT)	18,920	10.64	31.34	27.1%	36.48%
O'Reilly Auto Parts (ORLY)	30,520	210.93	22.73	14.6%	282.30%
US Auto Parts Network (PRTS)	59	1.63	21.30	(20.7)%	(25.93)%
Gentex (GNTX)	7,062	3.71	16.55	14.5%	22.95%

b. Assume that you use as comparables the following set of companies: KMX, CRMT, and GNTX. Estimate Advanced Auto Parts equity intrinsic value per share using the PB ratio from these peer companies.

Round answer to two decimal places.

$Answer

c. Use the same comparables as in part b and estimate Advanced Auto Parts equity intrinsic value per share using the PE ratio from these peer companies.

Round answer to two decimal places.

$Answer

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