“Besides a reflected glow as part-owner of today’s most glamorous gadgeteer, what does 77 a share get an Apple buyer? Let’s go first to the balance sheet. Impressively, 28 years since incorporating, Apple has no debt, long- or short-term. At last report, it had just $8.52 a share in total liabilities, mostly accounts payable. Those liabilities are easily covered by $22.34 in assets, including no less than $15.39 a share in cash and short-term investments. All in all, Apple’s stated net worth is $13.82 a share. That probably undervalues Apple’s real estate, which includes its Cupertino (Calif.) headquarters, plus plants in Sacramento and Ireland. Adjusting generously, we can guesstimate that one share contains $20 in net assets.” Robert Barker writes for BusinessWeek.
“For a buyer of Apple at 77, that leaves $57 to wonder about. Business could hardly be better: In the past four quarters, sales grew 45%, to $9.8 billion, as net more than tripled, to $508 million, or $1.28 a share, according to the Capital IQ, a division of Standard & Poor’s (MHP). With new products such as the $99 iPod shuffle and the $499 Mac mini winning rave reviews, bulls see Apple blowing away Wall Street’s consensus estimate of $2.05 a share in the next four quarters. Suppose it does, earning $2.45, the mean estimate not for calendar 2005, but for 2006. That still leaves Apple trading at 31 times earnings, vs. 26 for Dell Computer (DELL),” Barker writes.
Full article here.