What’s Apple really worth?  Much more than Wall Street seems to realize

“What’s Apple really worth? That’s the $150 billion question and the crux of a simmering debate between Apple fans, Apple customers, Apple investors and Wall Street,” Jim Goldman writes for CNBC.

“Apple’s gross revenue was either $7.9 billion GAAP, or nearly $12 billion non-GAAP. Adjusted net income grew at 125 percent compared to last year’s fourth quarter using non-GAAP metrics. But it’s a part of the Apple earnings story lost on most media, including me–until now, because we stick to the apples to apples comparisons of what Wall Street is looking for. Never mind nuances: If analysts offer the GAAP number for comparison, its the GAAP number we use. Lost, however, might be the real value of Apple itself, and the extraordinary growth this company is enjoying,” Goldman writes.

“Subscription accounting compels Apple to defer iPhone (and Apple TV) revenue to upcoming quarters, even though the sales of those phones occur in the current quarter. Thanks to Sarbanes-Oxley, Apple must divide the sale of each iPhone by 2 years, or 730 days,” Goldman explains.

“It becomes a monumental problem for Apple’s valuation when you consider that if Apple didn’t defer iPhone revenue, the product would account for 44 percent of Apple’s fourth quarter revenue, and a whopping 63 percent of its profits from the device. To overlook this, and not give this its fair due is to overlook Apple’s true value in the marketplace, and on Wall Street,” Goldman writes.

“The company probably realizes that it has made a mistake by choosing GAAP versus non-GAAP, and is trying to rectify the situation by releasing both, but trying to focus on the latter,” Goldman writes. “It’s one thing for Apple to focus on the latter, but a far different thing to get Wall Street to do the same.”

More in the full article – highly recommended – here.

Related articles:
Apple now has more cash than Microsoft – October 24, 2008
Stunning: Apple’s actual earnings grew 124.6% year-over-year – October 23, 2008
Analysts remain optimistic about debt-free Apple and its $25-billion cash war chest – October 22, 2008
Apple shares surge on stellar quarterly results – October 22, 2008
Analysts: Apple’s iPhone unit sales ‘jaw-dropping’ but company’s ‘prudent’ guidance ‘comical’ – October 22, 2008
Analyst: Apple is on a roll; Mac gaining market share at two to three times the PC industry – October 22, 2008
Apple could buy Dell outright; Mac-maker has more cash on hand than Dell is worth – October 21, 2008
Apple surpasses goal of 10 million iPhones sold in 2008; outsells RIM in September quarter – October 21, 2008
Live notes from Apple’s Q408 Conference Call – October 21, 2008
Apple bulldozes Street: $1.26 EPS; Mac sales reach all-time high of 2.5m, 6.9m iPhones, 11m iPods – October 21, 2008
Gartner: Apple Mac took 9.5% of U.S. market in Q308; Mac grew 29.4%, 30 times that of PC market – October 15, 2008