Apple's 2 trillion $ Valuation

godawgst

From a P/E ratio, cash generation model, debt ratio etc why not cheap, it's not out in the stratosphere.

For it to grow into the valuation (if possible) what must continue to happen and happen for them.

From what I can see

1) Continuation of Apple and Samsung essentially having a duopoly on cell phones.
2) Continuation if not increase of Apple App's growing 20-25% a year
3) Apple I pay has to become one of top 3 mobile processing payment ways (either organically or buying their way into one)
4) Apple TV has to become one of top 4 players in way people consume content.

Interesting to me, no where is computing (I pad/Mac) or wearables (Air Buds/I Watch) on that list which 10 years ago would have been two of their biggest bets.

Baseman

godawgst said:

From a P/E ratio, cash generation model, debt ratio etc why not cheap, it's not out in the stratosphere.

For it to grow into the valuation (if possible) what must continue to happen and happen for them.

From what I can see

1) Continuation of Apple and Samsung essentially having a duopoly on cell phones.
2) Continuation if not increase of Apple App's growing 20-25% a year
3) Apple I pay has to become one of top 3 mobile processing payment ways (either organically or buying their way into one)
4) Apple TV has to become one of top 4 players in way people consume content.

Interesting to me, no where is computing (I pad/Mac) or wearables (Air Buds/I Watch) on that list which 10 years ago would have been two of their biggest bets.

I think we see a retreat soon (I'm not selling). Apple's stock buybacks have goosed EPS. At 30X+ forward earnings, buybacks won't have the teeth they've had the past several years. Tim Cook is a finance guy and I wouldn't bet the farm he'll want to use FCF for buybacks at the level they have until the stock returns to a comfortable range.

After the kids pile into Apple after the split, I'd expect the institutional money and hedge funds to pivot and reduce their holdings.

EsophagealFeces

It’ll be interesting to see what happens with Epic Games’ lawsuit against Apple. It could cost Apple a lot of future revenue if it doesn’t go their way

greenblood

The key for Apple will be their apps. They can't rely solely on the sale of devices to keep that valuation.

PurpleThrobber

Noted: The Dow is price-weighted. Apple's split will drop them down to #17 on the Dow and drag down returns for the tech sector.

Well played, Tim Cook - your Chinese overlords will be proud of putting a dent in Trump's stock market success claims with your share price shenanigans.

Wouldn't be surprised if other FAANG members follow suit and announce stock splits between now and Election Day.

Pitchfork51

Apple is doomed. They are trying to fight progress by locking in their app store but that's going to go away almost completely in a few years.