What is the fair market value of apple


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The fair market value of Apple Inc. (AAPL) can be assessed using various valuation methods. Here, we present several viewpoints:
- Peter Lynch's Fair Value: Using Peter Lynch's formula, the fair value of Apple is $84.101. This method considers the earnings growth rate over the past five years and the trailing twelve-month earnings per share (EPS). The growth rate used is 12.85%, based on the average net income/earnings growth over the last five years.
- Intrinsic Value: The intrinsic value of one AAPL stock under the Base Case scenario is $136.842. This value is significantly higher than the current market price, indicating that Apple is overvalued by approximately 30% compared to its intrinsic value.
- DCF Model: Applying a Discounted Cash Flow (DCF) model, the fair value of Apple is estimated to be $1633. This method involves forecasting future cash flows and discounting them back to their present value. The DCF value is lower than the current market price, suggesting that the stock is trading at a premium.
- Market Capitalization: As of June 2024, Apple has a market capitalization of $3.283 trillion4, making it the world's second most valuable company. This market cap reflects the total market value of outstanding shares and is often used as a proxy for the company's worth.
- Comparison with Competitors: Apple's market capitalization accounts for roughly 93% of the Information Technology industry equity5. This indicates a dominant position in the industry, which can influence its valuation relative to competitors.
In conclusion, while the fair market value of Apple is subject to various interpretations and methods, it is evident that the current market price is significantly higher than some of the estimated fair values. This suggests that Apple may be overvalued, especially when compared to its intrinsic value and DCF-based fair value estimates. However, the market capitalization and industry dominance also indicate a strong market perception of the company's worth. Investors should consider these factors and their own investment objectives when evaluating Apple's attractiveness as an investment opportunity.
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