Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod. It also provides AppleCare support and cloud services; and operates various platforms, including the App Store that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts. In addition, the company offers various services, such as Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property. The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets. It distributes third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. Apple Inc. was incorporated in 1977 and is headquartered in Cupertino, California.
Discounted Cash Flow Valuation of Apple Inc.
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +23.51%.
The trend of Net Margin over the past 5 years is +0.9%.
The average ROA over the past 5 years is +26.24%.
The trend of ROA over the past 5 years is +3.32%.
The average ROE over the past 5 years is +117.93%.
The trend of ROE over the past 5 years is +27.78%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 1.17.
The trend of Debt/FCF over the past 5 years is -0.16.
Graham’s Stability measure stands at 1.00.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +7.61%.
The trend of Revenue growth rate over the past 5 years is -0.54%.
The Earnings CAGR over the past 5 years is +10.26%.
The trend of Earnings growth rate over the past 5 years is +0.11%.
The Equity CAGR over the past 5 years is -10.32%.
The trend of Equity growth rate over the past 5 years is -0.71%.
The FCF CAGR over the past 5 years is +9.2%.
The trend of FCF growth rate over the past 5 years is -0.15%.