As of at present’s shut of $136.87, AAPL is buying and selling at a 30.2x a number of on my NTM EPS estimate (29.4x when excluding NTM internet money and dividends).
I’ve prolonged the mannequin projection just a few extra years into the longer term, and what got here out is fairly exceptional, although not stunning: a brand new virtuous cycle of self-reinforcing development has ensued for Apple. Beginning NTM on account of straightforward iPhone comps and resilient “work/be taught from residence” tendencies, adopted over subsequent 2-3 years by 5G and Apple Silicon adoption, additional compounding even long term into all strains on account of ecosystem synergies (my so known as “crazy” modeling). And all that’s even earlier than contemplating doubtlessly enormous initiatives in new units comparable to tags and glasses, or new providers tackling transportation and well being.
Keep in mind I could possibly be unsuitable, overly optimistic about iPhone particularly, which if as a substitute stagnates or retains declining from right here, because it has the final 5y amid declining smartphone and PC markets (but there was a pandemic final 12 months and tariff wars the prior two), it will probably throw a wrench within the cycle’s gears. Nevertheless, I sense the subsequent 5 years will not be as powerful because the final. Granted there may be elevated regulation, authorities intervention, and better taxes, however I feel none of it should quantity to a lot in the long run. So, on with my rosy image.
By the tip of the 5y projection in calendar 2025 I get $486b in income (from $288b in C2020) and $108b in internet revenue (from $60b in C2020), and sustained ~7/8% annual development respectively wanting additional ahead. All that revenue creates one more suggestions loop for the inventory because it all should be returned to shareholders (totaling $1 trillion by finish of C2025 in buybacks and dividends mixed since program began in 2012) if the said purpose of turning into internet money impartial is met and maintained, leading to EPS greater than doubling to $8 and the share worth breaking $200 with regular ~11/12% annual development respectively from there.
I consider it is a conservative projection, however nonetheless take it as a really tough information, say permitting +/- 2-year window given the uncertainties of projecting that far into the longer term on tech’s extraordinarily dynamic waves, to not point out fickle broad market gyrations in sentiment positive to come back sooner or later.
Talking of market sentiment, I caved and nudged the projected long-term a number of to 22x from 20x, regardless of saying final time I would fairly wait till the distinctive development this quarter (FQ2 EPS up 47%!) and 12 months had handed. I simply really feel the market will not be so affected person with that scorch already baked into consensus numbers. And I nonetheless left some room to bump it extra once we truly get to see these outcomes. So there, sufficient mentioned.
Detailed estimates:
3mo ending Dec20 Rev$B GM% $EPS ---------------- ----- ---- ---- Analysts consens 102.6 - 1.40 My estimates 104.9 38.2 1.45 (17.1b shares) 3mo ending Mar21 Rev$B GM% $EPS ---------------- ----- ---- ---- Analysts consens 73.9 - 0.90 Apple gde lo (e) 72.0 38.5 0.85* Apple gde hello (e) 75.0 39.5 0.94* My estimates 74.5 39.5 0.94 (16.9b shares) *EPS steerage ranges derived from different figures offered by Apple and diluted shares excellent estimated by me 12m ending Sep21 Rev$B $EPS ---------------- ----- ---- Analysts consens 317.5 4.01 My estimates 330.1 4.27 Valuation Timeframe NTMfrom $EPS Y/Y Mult Val $* Div Tot --------- ------- ---- --- ---- --- --- ---- --- Path Val Jan2020 3.47 10% 15.0 52 4.5 0.81 57 Frwrd Val Jan2021 4.53 30% 18.8 85 3.0 0.90 89 1y Goal Jan2022 5.19 15% 20.9 109 2.1 0.98 112 2y Worth! Jan2023 5.77 11% 21.7 125 1.3 1.09 128 *Money per share steadiness internet of debt and industrial paper
F1Q21 Statements of Operations
Revenues F1Q21e F1Q20 Y/Y%
-------- ------ ------ -----
iPhone 60,861 55,957 +8.8
Mac 9,563 7,160 +33.6
iPad 7,387 5,977 +23.6
W/H/A 11,820 10,010 +18.1
-------- ------ ------ -----
Merchandise 89,631 79,104 +13.3
Companies 15,229 12,715 +19.8
-------- ------ ------ -----
Tot Revs 104,859 91,819 +14.2
Gross Margin Breakdown
-------- ------ ------ -----
Merchandise 29,920 27,029 +10.7
Companies 10,164 8,188 +24.1
-------- ------ ------ -----
Tot GM 40,085 35,217 +13.8
-------- ------ ------ -----
Prod GM% 33.4% 34.2% -0.8
Svcs GM% 66.7% 64.4% +2.4
-------- ------ ------ -----
Tot GM% 38.2% 38.4% -0.1
Op Expns 10,759 9,648 +11.5
-------- ------ ------ -----
OpIncome 29,325 25,569 +14.7
Op Mrgn% 28.0% 27.8% +0.1
OIE 68 349 -80.5
-------- ------ ------ -----
Pre-Tax 29,394 25,918 +13.4
Tax Fee 15.5% 14.2% +1.3
Tax Prov 4,556 3,682 +23.7
-------- ------ ------ -----
Web Incm 24,838 22,236 +11.7
Web Mrg% 23.7% 24.2% -0.5
Dil Shrs 17,078 17,818 -4.2
-------- ------ ------ -----
EPS $1.45 $1.25 +16.5
Quantities in hundreds of thousands besides EPS in {dollars} and ratios in %
