I don't think I need to introduce Apple, it's one the most famous brands in the world. It produces iPads, iPods, Mac computers and of course the iPhone. It was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. The company almost went bankrupt after the burst of the dotcom bubble in 2000s. With the introduction of iPhone, Apple quickly rebounded and became the giant it is today.
Apple financials
Valuation
I have done a three stage DCF valuation with these assumptions:
- 12% profit growth for the next 5 years, 6% for years 5-10 and 2% thereafter
- using the Capital asset pricing model, I arrived at a discount rate of 8.2%
I have done a three stage DCF valuation with these assumptions:
- 12% profit growth for the next 5 years, 6% for years 5-10 and 2% thereafter
- using the Capital asset pricing model, I arrived at a discount rate of 8.2%
Apple valuation
As you can see, Apple is still undervalued with current growth assumptions. Even more so, if it comes up with a new blockbuster products. I believe I used conservative estimates to derive AAPL value, and there is still at least a 31% margin of safety. Hedge funds obviously realize this, and investors like Carl Icahn, Joel Greenblatt, David Einhorn and Daniel Loeb hold large positions in the stock.
Apple chart
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