Is Apple stock a buy right now?

Amid concerns of rampant U.S. inflation, supply chain disruptions, and the Russian invasion of Ukraine, Apple stock has dipped from near $180 at the end of March, close to its all-time high, to below $155 today. For long-term investors, is Apple’s stock a buy right now?

Parkev Tatevosian for The Motley Fool:

Apple has delivered robust growth despite its massive size. In the past decade, its revenue increased at a compound annual rate of 12.9%. That has translated into sales rising from $156 billion in 2012 to $366 billion in 2021. The iPhone has fueled Apple’s success over that time. Now in its 13th generation, the popular smartphone is in the pockets of roughly 1 billion people worldwide.

Perhaps equally as important, Apple is progressively expanding its services business. That segment includes its Apple Music and Apple TV+ streaming services, which have grown to over 825 million paid subscriptions worldwide, and rose by 165 million in the last year. In its most recently completed quarter, which ended March 26, revenues from Apple’s services segment totaled $19.8 billion. The company’s overall revenue was $97 billion during that period.

Apple is trading at a price-to-free-cash-flow ratio of 25.9 and a price-to-earnings ratio of 26.1. By those metrics, the stock is not cheap — but it’s not expensive either. Considering that over the last decade, Apple has transitioned more of its business to recurring revenue sales that produce higher margins, one can argue it justifies a higher price multiple.

MacDailyNews Take: Apple is dramatically undervalued, but the question is, “how long can it go?” Something sub-$150 sounds to us like an amazing deal.

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