Is Apple stock overvalued?

[Southie]

Re: Is Apple stock overvalued?

@Southie

Since this thread opened AAPL has gone from 585 to 705 (split adjusted). So 20 pc5 gqin.Div yield now is 12 oct. Avg over the 4 yrs 1.25. 5 pct in 4 yrs. Total 25 pct return

Snp500 1400 to 1990. Or 32 pct return. And 2 0ct yld times 4. So 40 pct.

The mkt beat aaple in the last 4 years. You woukd not know that from aapl humongous mkt cap.

@queer

good point, your honor, but that is just a 4 yr vindow. what do you think of AAPL’s current p/e and valuation compared to the S&P500’s?

@Southie

Good point re 4 year window - but close enough to 5 years.

The P/E 4 years back was 13 and change - from post 5 or 6 (or thereabouts). That ratio has now shrunk to 11. Or by 16 pct. (The snp 500 p to e may have been 20)

At that time, I had felt those were peak earnings. And those earnings could not increase much more. The 20 pct increase in price in spite of 16 pct decrease in p to e appears to indicate earnings has increased by 1.2 times 1.16 or 1.4 or 40 pct. Some of the increase could be due to buybacks. So maybe earnings increase 35 pct in 4 yrs. Or 8 pct per year.

Not bad. But the pundits at that time were considering AAPL undervalued because they expected 15 to 20 pct earnings growth. That was not sustainable.

Today it’s p to e 11. Snp500 22. So probably not as overvalued relative to market. But with growth in eanlrnigs slowing down, this p to e may be justified.

But risk is that the GO TO STOCK of last 6 years may become pariah. Then watch out below.

At that point one should back up the truck.

AAPL at 93.5. Or split adjusted 656. From 585 that is gain of 11 pct.in 5 years. Snp500 at 2075 or.from 1400 gain of 675. Or gain of 48 pct.

No contest.

Thank you.