“Since the start of the new millennium, Apple (AAPL) has become among the nation’s most highly valued enterprises measured by market cap, the world’s largest distributor of music, a major global retailer and the biggest mobile device maker when ranked by revenue,” Robert Paul Leitao writes for SeekingAlpha.
“Apple’s rates of growth over the past six years have been so strong, in FY 2011 revenue surpassed $100 billion,” Leitao writes. “By the end of the company’s FY 2013 in September of that year, revenue will surpass $200 billion.”
Leitao writes, “In FY 2011 Apple reported revenue growth of 66% and earnings per share growth of 82.7%. Those results foreshadow at least two more years of strong revenue and earnings growth for the company. Although the rates of quarterly revenue and earnings growth will differ each period due to the influences outlined in this article, growth over the next eight quarters will propel Apple’s annual revenue above $160 in FY 2012 and well beyond $200 billion in FY 2013. FY 2013 eps will most likely surpass $50 per share.”
Read more in the full article here.
And yet the Earnings Peg Ratio is 0.5 for Apple’s stock!
PEG is P/E divided by Growth. I have never heard of an “Earnings Peg.” If the P/E is low and the Growth is high, then buy, buy, buy!
No other company really serves as a model for Apple, so WS really doesn’t know what to make of it, other than escalating its value as much as it has to (but no more).
Even a TOST analysis (corrected for PBAJ) fails to adequately vector for CAKE, and LATTE, although worse would be to ignore them outright.
In a very real sense, the same ambiguity the regular investor feels – “AAPL has so much potential, and yet it’s already so high, what do I do?” – is what’s reflected in the broader market.
At least TOST tells us that question is asked at $500 a share before the crosswinds of CAKE or LATTE move it one way or the other.
If it were a 1.0, AAPL would be properly priced. So, what is this 50% of sale price on the world’s primer technology, media, software, personal AI, …. company with the world’s biggest fastest growing bank account with NO DEBT?
Sorry, stupidity really get to me.
Apple is a real headscratcher as for determining the company’s worth and growth potential. Some say that its growth is coming to an end and others say its growth is nearly unlimited. How can two people that look at the same company and come up with such an opposing view. Even if I view Apple from a neutral point of view, I certainly don’t see collapse just around the corner since the company still appears to have a lot of momentum due to its size. Would consumers really abandon Apple products in a year or two? Why? Unless a company made a huge blunder in a product, I’d doubt that customers would just stop using all their products enmasse for no reason? Would IBM or Hewlett-Packard elicit such opposing views? The fact that neither of those companies has the wealth of Apple, I wonder what makes Apple seem so fragile in investor’s eyes.
Despite Apple being able to grow revenue in leaps and bounds, the way Wall Street sees the company never changes. What would Apple have to do to change that view? It’s already heading into the enterprise while maintaining it’s grip on consumers and still that isn’t even enough. What exactly is demanded of Apple to make it appear as a solid company by Wall Street standards? With all that reserve cash, one would think that Apple can practically do anything it needs to keep its lead or change direction with a major acquisition. How can Apple be written off that quickly?
I’ll be honestly concerned if the company earns over $30 billion in revenue this quarter and the share price barely moves. It makes no sense that a company can keep making more money every quarter and yet the worth of the company goes down. Apple is doing no better now than it was nearly six months ago.
“I wonder what makes Apple seem so fragile in investor’s eyes.”
Quick buck people want to pump and dump up and down. Apple is an emotional stock and they can make this scheme work. So they do. it makes them money.
PERIOD…. PS. Anal….yst are just to stupid to understand any of this.
Just a thought,
en
Many of the analysts and pundits simply cannot believe that Apple can continue growing at such high rates. Eventually, they will be correct because absolutely nothing can grow without bound (as the human population of the world seems intent on proving). But that does not mean that Apple cannot continue to grow at a pretty good clip for some time to come. The iPhone 4S has plenty of potential customers in China, for example. And so does the iPad 2.
Many analysts see Android as the bane of Apple, similar to the manner in which Windows 3.0 and beyond grew to dominate Mac OS sales in the 1990s. But history does not always repeat itself, particularly when the core elements of these two Apple epochs have little in common.
The way that I see it, the market has already priced in a substantial anticipated flattening in Apple’s future growth. Since I do not expect that to happen in the next few years, I am happy to continue accumulating Apple and enjoying the growing cash hoard.
It is because AAPL doesn’t fit the model of the financial world and of the stock market, which bank on the fragility of companies that have large debts with the banks.
My theory about why aapl is perpetually undervalued (and always will be) is that they refuse to play the games that most other companies partake in to play with their stock price: stock buybacks, dividends, talking about future products, leaking data about financial performance, rounds of layoffs, etc etc etc. But apple shouldn’t do those things because they de-value the company, even though in the short term they would pump up the stock price. As an aapl stock holder, I am glad Apple doesn’t do those things because 1) I’m in it for the long haul and 2) Wall street cannot ignore added value quarter after quarter forever.
The market better hurry up and “get it”, cos when Apple’s growth inevitably slows the stock won’t have a hope.
My god, does anyone else come using iPad and Safari as their browser of choice The experience sucks eggs! I don’t know whether it’s the iPad or MDNs use of advertising.
That fricking annoying pop up ad that continuously floats up and down the page promoting We Have Answers! is from the company Chitika and they’re is promoting weight loss?
What I see happening here is encroachment, much the same way Microsoft Word’s interface consummed all but a small area in the center for typing.
MDN has divided the screen into three columns and on my iPad it looks like the center is shrinking. What a horrible mess.
Ament bother, MDN is testing our nerves, on the Mac I never see these adds thanks to adblock. We need adblock on iPad, apple needs to allow plugins
I agree. Find a way to block ads on tablets. They are annoying.
I will point out that there are settings to kill pop-up ads as well as plug-ins to kill ads. I won’t tell you what they are as MDN depend on advertising to run and they typically censor posts pointing to ad removal tools. Essentially, if you do your homework you’ll find the experience here much nicer.
Also, be sure to try out the MDN app from the iTunes Store. It’s free and it simplifies the interface here for mobile devices including ad removal. I can’t say it’s a well written app but it’s at least functional for reading.
I have said it before and I will say it again…
If you are an investor in AAPL please do the following:
1. Research.
Don’t just trade based on one headline, rumor or what a friend said. Which should be a given for any trade.
2. Steve Jobs was an innovator, but he is not “Apple”.
Apple is made up of thousands of employees that support the company. Yes, a change of captain will affect the ship, but it will still sail on and be profitable. That is why there are checks and balances in place. Tim Cook might not be perfect, but neither was Jobs. (Anyone remember the iPod Hi-Fi?)
3. If you want a product, it does not mean Apple will make it.
Rumors are great but in the end, they are just rumors. Apple has the right to test and design anything and release nothing. Just because they didn’t release a rumored product does not mean they are failing as a company. They just didn’t meet your expectations.
4. Your money is yours.
The stock may hit $3000, it may tank to $10, but what you do with it is your choice. Don’t blindly follow what other people are doing. That is a horrible mistake that investors make. Make informed, intelligent trades, based on real information.
5. Analysts are just that.
Now unless I am missing something, I have never seen an analyst with a crystal ball, or a wand. They are human, just like you and I. They look at the numbers and make, sometimes poor, judgements and relay that to you. But they have a poor track record, as with any statistics, there is room for error and emotion. So keep that in mind when you believe anything they say. Let us not forget, they are comparing sold numbers to shipped numbers right now for iPhones. If you really think about that as an investor, there should be riots in front of every analysts’ office.
If you really take the time understand how it works, yes, Apple is a bumpy ride, but a lot of that comes from people ignoring the little things. So have a little faith. If they mess up big and it all falls apart, you will know and can pull out then. Until that time, if it ever comes, ignore the waves and enjoy the view.
#D-Bog
We’re the choir here. Getting the knowledge and understanding of stock trading out to the DayTraderTard sheeple is one of the major problems. They’re not tech savvy enough to hang out here. The certainly aren’t stock trading savvy.
To paraphrase Gurney Halleck (Patrick Stewart) from the movie of Dune:
“Mood? What has mood to do with it? You fight when the necessity arises — no matter the mood! Mood’s a thing for cattle or making love or playing the baliset. It’s not for stock trading.”
..Ooooh, I love my iPod Hi-Fi!
Room-filling sound, works with Apple Remote, also runs on batteries, easy-carry handle, no distracting alarm-clock (or other) display ..Ooooh, I love my iPod Hi-Fi!
Stupidity rules the world. If it encounters something intelligent like Apple it get magnified by 1000.
The PC zombies have been brainwashed to believe that Apple is just a fad tat will eventually fade.
They still hang on to their pathetic tech of the 80s like Windows, because they are Ignorant and unwilling to join progress.
So they don’t get Apple and it’s potential to grow 1000 times over.
Apple sells 5% of the world’s computers and 4% of the world’s cell phones.
It has to be said, over and over again.
There is room for growth.
Oh, yes, Lot’s of room for growth on AAPL.
Do your own research and verify info’s.
AAPL = $555 in Dec. 2012
Add $101 bucks per year until 2015 🙂
Every three months AAPL has been and continues to report Record Profits & Revenues in public open records!!!!!!
Zero debt + $81 Billion CASH + Hot in demand products + Global expansions = BUY AAPL 🙂
This is an often visited topic. I suspect one aspect of this is that innovative companies like Apple have a digital aspect to them. They are required to produce one hit after another which is hard to forecast. Investors like to be able to forecast. They are more comfortable with commodities where you can get a rough forecast based on the state of the economy, population size, etc. Products like those Apple makes are difficult to forecast. Hence you see lots of comments comparing them to Beanie Babies, Cabbage Patch Dolls and the like.
Having said that, I think the market is also kind of crazy else why would Amazon be granted a sky high stock price when they are forecasting to possibly lose money this quarter? Go figure.