Apple currently sells at 10.5 times earnings for fiscal year 2013, ending September 30. For 2014 and 2015 analysts are calling for earnings to be $52 and $60 per share respectively. On the March 26 close of $461 per share Apple trades for only 8.9 and 7.7 times the 2014 and 2015 estimates. The average P/E (price/earnings) ratio for Apple for the past five years has been 15.4. Based on the above estimates, Apple’s earnings are slated to grow by 18.1 percent for 2014 and 15.3 percent for fiscal 2015, and yet it only sells at 10.5 times this year’s earnings. That represents a PEG (price to earnings growth) ratio of .58 based on 2014 earnings. This means that the stock is selling for only 58 percent of its projected growth rate for next year. This is really cheap.
March 2012 39,189B ( 35.1 million iPhones and 11.8 million iPads) -- March 2013 est 41,437
June 2012 35,023B (26 million iPhones and 17 million iPads ) --- June 2013 est 37,649
Sept 2012 35,966 B ( 26.9 million iPhones and 14 million iPads )------ Sept 2013 est 45,531
Dec 2012 54,512 B ( 47.8 million iPhones and 22.9 million iPads) ------ Dec 2013 est 63,206
March 2014 est 51,598B
June 2014 est 48,776B
Sept 2014 est 57,065B
While there are some good analysts, most have never had the experience running so much as a convenience store, and, as such, lose focus on the larger landscape, their minds’ eyes suffering from tunnel vision and myopia. Apple is way undervalued at these levels. Apple was named number one in customer satisfaction for the ninth straight year by JD Power and Associates. Their phones and tablets are here to stay. The ride may get bumpy at first, but Apple will be a $600 stock within a year……and back to $700 within two. The late great Steve Jobs is looking down and smiling on his creation.