“After a year like Apple had last year, it’d be silly to try to blow people away at Macworld. Perhaps it was better to lower expectations. I’m guessing that whether intentionally or not, that’s what Jobs did on Tuesday,” Adam Lashinsky blogs for Fortune.
MacDailyNews Note: Adam Lashinsky is a senior writer at Fortune, where he started as a contributing columnist in 1999. He covers finance and Silicon Valley for the magazine. He also is a featured commentator for “Marketplace,” the nationally broadcast radio business-news magazine, and a regular contributor to business-news programming on the Fox News Channel.
“The faithful’s disappointment had nothing on Wall Street’s, though. Apple’s shares have now fallen $19, or almost 11%, since Monday’s closing price. This will seem confusing to market watchers of the amateur variety as well as the pros. No one has answers, only guesses,” Lashinsky writes. “…Trying to understand the selloff almost isn’t worth the effort. Apple is one of those stocks that defies explanation.”
Lashinsky writes, “At $160 a share, Apple trades for about 31 times expected earnings for its year that ends in September. Analysts expect Apple to grow earnings this year about 31%, an astounding growth rate for a company this size. Next year they see 25% growth. In other words, at its current multiple, Apple is getting little or no premium to the market, despite the iPhone working out to be a bigger than expected seller and the Macintosh picking up speed. (Google , by the way, at $616, is off 18% from its high. It trades for about 30 times expected 2008 earnings and is expected to grow by 33% … I’m just saying … )”
“Apple reports earnings next week. It has a habit of underpromising and overdelivering. It isn’t the expensive stock it used to be,” Lashinsky writes.
Full article here.