“Apple (AAPL), the world’s largest high-tech company, has a remarkable growth record. In the last 5 years the company was able to boost its earnings by a whopping 60.03% annually. In 2006, EPS was $2.27, whereas the ttm [trailing twelve month] EPS is $20.99,” Dr. Osman Gulseven writes for Seeking Alpha.
“As of June 9 close, the stock was trading at $331.49 with a ttm P/E ratio of 15.8, and forward P/E ratio of 11.5. Wall Street has diversified opinions on Apple’s future. The bottom line is 7.2% growth, where the top line annualized growth estimate is 34.1%. Average five year growth forecast estimate is 17.2%,” Gulseven writes. “What is the fair value of Apple given the forecast estimates? Let’s calculate it together using discounted earnings plus equity model.”
Gulseven writes, “According to my 5 year discounted earnings model, the fair value estimate for Apple is $430 per share. As of June 9 close, Apple was trading at $331. Apple is undervalued by $100. While I do not expect this gap to be closed by this year, I think Apple will beat the market in the next 5 years.”
Read more in the full article here.
It’s been trapped in a range since Feb.
I’m buying more Monday at the opening of the market. In the market downdraft Apple shares are being sold by some to cover margin calls on other trades.
Long term, it will look cheap.
It’s ridiculous to doubt Apple’s continuing success.
Apple is unrivaled in software engineering, hardware quality, design, ingenuity, integrity and has an impeccable track record of being the industry’ s oracle,which cannot be matched or denied.
This is one history that cannot be revised.
… mistake the price of the stock for the value of the company or of it’s profits. Please don’t make this mistake. The price of a stock is an arbitrary value determined by the decisions of a large selection of buyers and sellers, and potential buyers and sellers. While breeze would seem to be right, that positive judgement may not define the stock prices’s value.
SOMETHING better happen reasonably quickly since the stock has dropped 35 POINTS in the last couple of weeks….That’s a 10% downswing so this knuckle-heads numbers are wrong.
patientce grasshopper …..
Things ain’t gonna change until the idiots realize that the iPad is the second coming of the iPod and not the second coming of the Mac.
As well, the Android phone will not damage the iPhone sales in this lifetime.
Those waiting for a new ‘Microsoft’ to once again eat Apple’s lunch better not be holding their breath.
Normal investment return time is 5-10 years.
With Apple earnings like $25 billion per year this would mean that the company has to cost 25 * (5 to 10) = $125 billion to $250 billion. Since Apple has $65 billion in as net liquid assets already now, the cost should be 125 + 60 = $185 billion to 250 + 60 = $310 billion.
However, Apple has big chances to grow to have $40 billion of net profits per year, so taking this into account the range of company’s actual cost should be higher than $185 to 310 billion.
I’m fairly certain Apple stock has at least a 3% upside but 30% is a bit outrageous. Apple may be firing on all cylinders, but the stock is misfiring on half the cylinders. Must be fouled spark plugs or the fuel injectors are clogged. I think I’d better check Apple’s share price on Monday but lord help Apple shareholders if the general market is down. Apple will be kissing that $320 mark like a love-starved prom date after her first wet kiss.
PS: Don’t forget the hot buying opportunity for the massive Apple rally come next earnings announcement. Ahem!