Financial Evaluation of Apple Inc.
Assignment 6 Yajing Cao
1.Current Market Evaluation of Apple Inc.
[pic]
[pic]
(Charts from Yahoo Finance and YCharts)
From the charts above, we can find that Apple’s current PE is 16.7, much lower than its past five years’ average 23.32. Also, its PEG Ratio is 0.64, which is a very healthy one.
What’s more, take Apple’s some key advantages into account:
(1) Apple has a strong brand name, loyal customer base, and defensible installed base.
(2) iPod is still a major traffic and revenue driver for the company’s computer products. (3) Launch of video Nano iPod has enhanced revenue and benefited the company as a whole.
(4) iPhone has enabled Apple to reposition portable players business for growth, and enter the high-end segment of the smart phone market at the same time.
(5) Apple has an excellent cash position and balance sheet with no debt.
I think Apple is currently trading at a discounted, cheap or depressed valuation, what I are essentially concluding is that the current market price as determined by the current state of supply-demand parity is underpricing shares of Apple based on some higher projected future value.
2. Comparison to its peers
[pic]
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Form statistics above, compared to its peers, Apple is undervalued.
3.Target investor styles
According to Apple’s performance and industrial feature, I will choose Growth Investors as my target audience. The reason is that Apple has high average revenue and earnings growth year-over-year, due to its technology development. Also, Apple didn’t have dividends these two years by reinvesting in new opportunities. Even though it is undervalued currently, its 16.7 P/E Ratio is comparably high than its competitor such as RIM and HPQ. All of these features are favors of Growth
1.Current Market Evaluation of Apple Inc.
[pic]
[pic]
(Charts from Yahoo Finance and YCharts)
From the charts above, we can find that Apple’s current PE is 16.7, much lower than its past five years’ average 23.32. Also, its PEG Ratio is 0.64, which is a very healthy one.
What’s more, take Apple’s some key advantages into account:
(1) Apple has a strong brand name, loyal customer base, and defensible installed base.
(2) iPod is still a major traffic and revenue driver for the company’s computer products. (3) Launch of video Nano iPod has enhanced revenue and benefited the company as a whole.
(4) iPhone has enabled Apple to reposition portable players business for growth, and enter the high-end segment of the smart phone market at the same time.
(5) Apple has an excellent cash position and balance sheet with no debt.
I think Apple is currently trading at a discounted, cheap or depressed valuation, what I are essentially concluding is that the current market price as determined by the current state of supply-demand parity is underpricing shares of Apple based on some higher projected future value.
2. Comparison to its peers
[pic]
[pic]
Form statistics above, compared to its peers, Apple is undervalued.
3.Target investor styles
According to Apple’s performance and industrial feature, I will choose Growth Investors as my target audience. The reason is that Apple has high average revenue and earnings growth year-over-year, due to its technology development. Also, Apple didn’t have dividends these two years by reinvesting in new opportunities. Even though it is undervalued currently, its 16.7 P/E Ratio is comparably high than its competitor such as RIM and HPQ. All of these features are favors of Growth