Let's go back in a time machine to the early 2006. You just read this in an
Question:
Let's go back in a time machine to the early 2006. You just read this in an equity research report about TransDigm, a company that has recently gone public. (TransDigm manufacturers aerospace components and subsystems and has grown revenue and EBITDA more than 20% in recent years through a combination of internal growth and acquisitions.
11a. Explain how TransDigm is valued relative to the four other comparable companies in terms of range and median multiples. (Don't bother looking up what companies these are; just take at face value that they are comparable). Include all of the multiples you think are relevant (there should be four, two for each year). Show a table summarizing these figures and also interpret what you see. This is a quantitative and qualitative question. (1 point)
11b. Explain how and why the equity research team has set a price target of $29.00 per share in the next year. Specifically, walk through the "math" of how they get to this target and explain why they think this is valuation is justified. (1 point)
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