“Here’s my October prediction: Apple’s P/E is going to get a lot smaller, even if the stock price goes up 10%,” Stephen Rosenman writes for Seeking Alpha.
“You can count on that sad prophesy. Apple’s PE is already an absurdly low 16 despite its booming business. Compare Amazon’s much higher 98 PE for far less growth,” Rosenman writes. “Even Yahoo’s valuation is higher!”
“How could the PE go any longer? After all, Apple’s growth story is intact,” Rosenman writes. “If the analysts even come close in their predictions, this fiscal year’s earnings are going to be up a whopping 80%. Yet, even sensational earnings won’t matter. The sad fact: It is virtually certain the company’s valuation will drop further.”
Rosenman writes, “If the analysts hit the number (a first), earnings would be up 83% year over year. If I’m on the mark, earnings practically doubled. All for a piddling PE less than 15, probably 13.7. Crazy, no?”
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