L$01,2,3$ M$15-18.$ Identifying Comparables and Valuation Using PB and PE

ADVANCED AUTO PARTS $($AAP$)$

Homewory

$\backslash$table$[[$Ticker$,\backslash$table$[[$Market Cap$],[($$ mil.$)]],\backslash$table$[[$PB$],[$Current$]],\backslash$table$[[$Forward$],[$PE $($FY$1)]],\backslash$table$[[$EPS $5-$Year Historical$],[$Growth Rate$]],\backslash$table$[[$ROE$],[($T $4$Q$)]],\backslash$table$[[$Debt$-$to$-],[$Equity$]]],[$Advanced Auto Parts $($AAP$),11,110,3\mathrm{.}03,19\mathrm{.}71,1\mathrm{.}6\%,11\mathrm{.}39\%,0\mathrm{.}204],[$AutoZone $($AZO$).........,28,440,17\mathrm{.}89,17\mathrm{.}78,5\mathrm{.}7\%,91\mathrm{.}32\%,3\mathrm{.}240],[,14,010,4\mathrm{.}06,16\mathrm{.}06,11\mathrm{.}3\%,25\mathrm{.}44\%,4\mathrm{.}188],[$America$\text{'}$s Car$-$Mart $($CRMT$)......,18,920,2\mathrm{.}27,12\mathrm{.}01,17\mathrm{.}6\%,20\mathrm{.}72\%,0\mathrm{.}589],[$Copart Inc. $($CPRT$).,18,920,10\mathrm{.}64,31\mathrm{.}34,27\mathrm{.}1\%,36\mathrm{.}48\%,0\mathrm{.}226],[$O$\text{'}$Reilly Auto Parts $($ORLY$)...,30,520,210\mathrm{.}93,22\mathrm{.}73,14\mathrm{.}6\%,282\mathrm{.}30\%,26\mathrm{.}150],[$US Auto Parts Network $($PRTS$).,59,1\mathrm{.}63,21\mathrm{.}30,(20\mathrm{.}7)\%,(25\mathrm{.}93)\%,0\mathrm{.}000],[$Gentex $($GNTX$).,7,062,3\mathrm{.}71,16\mathrm{.}55,14\mathrm{.}5\%,22\mathrm{.}95\%,0\mathrm{.}000]]$

Advanced Auto Parts' book value per share is $$51\mathrm{.}18$ and its forwato Parts and a peer group of companies from the auto parts sector.

Required

a$.$ Identify a set of three companies from this list to use as comparables for estimating the equity intrinsic value of Advanced Auto Parts using the market multiples approach.

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.

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.