“I wrote back in April about how analysts were just ‘not getting’ Apple’s earnings. They were having a difficult time interpreting Apple’s deferred revenues,” Ken Cheng writes over in our Opinion section today.
“Since then, analysts, and by inference investors, have continued to get it wrong, punishing Apple’s stock price,” Cheng writes.
“Steve [Jobs] decided to spill the [non-GAAP] beans because analysts and investors were underestimating the true sales of Apple. While sales and profits were still growing nicely, you had pundits saying that sales and profits were actually slowing! This allowed the shorts to push the stock down, as slower growth merits lower price multipes,” Cheng writes.
“Apple made $2.4B last quarter, that would put it between Pfizer and IBM both worth about $113B, but Apple would justify a higher multiple because of its growth rate, and yet, Apple is trailing this pack of behemoths at $86B,” Cheng writes.
Read the full article, with the opportunity to provide reader feedback, over in our Opinion section here.
