Sell AAPL

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by Goldonthehorizon

Apple earnings report does not justify a forward P/E of 28. I estimate it should be closer to 20 or below. My rational:

  1. Revenue down for 3 straight quarters.
  2. iPhones, Mac’s, and iPads stacking up with no buyers in site.
  3. No significant growth in emerging markets. Folks out there are happy with what they can afford, and a strong $ will suppress growth in China, Indian, and other stagnant economies.
  4. No growth story. Services up a meager 6%. Apple Pay is out there, but Apple is competing in an ocean of pay/banking apps.
  5. Granted a new iPhone is coming – so what? What’s special about that?? VR/IR Goggles great, but IC tech needs a couple of years to develop.

Bottom line: roughly estimating a P/E of 20 – best case for a mature hardware company with a solid balance sheet – I see fair value at $130/share.