THE WORKDAY CAFE
Apple Inc. (AAPL) Valuation
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Executive Summary
Apple Inc. is now the most valuable publicly traded company globally passing Saudi Arabia's owned Saudi Aramco but is the company really worth its market cap? Apple has been a global IT device focused powerhouse since the early 2000's and has created an ecosystem of software and hardware that keep customers Apple dependent but also satisfied. The line of iPhone's is Apple's major revenue earner but the company has vertically integrated and is very successful in its other segments ranging from wearable technology to the many services it provides.
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- $223.67 - Value (PPS) from Industry Relative Valuation
- $646.12 - Value (PPS) from Financial Relative Valuation
- $374.63 - Value (PPS) from Discounted Cash Flow
$410.79 - Reconciled Share Price Estimate
When comparing to Apple's current share price of $435.75, a hold recommendation is issued.
Table of Contents
- Company Overview
- Revenue & COGS Trends
- The Customers & Revenue Geography
- Distribution Strategies
- SWOT Analysis
Company Overview
Apple Inc. (AAPL) currently trades on the NASDAQ with a current price of $435.75, a market cap of 1.89 trillion, and has a fiscal year end on the last Saturday of September. All information is in millions of USD except for share prices or marked otherwise.
Revenue & COGS Trends
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- 2019 Revenue Values:
- $142,381 - iPhone
- $25,740 - Mac
- $21,280 - iPad
- $24,482 - Wearables, Home and Accessories
- $46,291 - Services
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- 2019 COGS Values:
- $144,996 - Products
- $16,786 - Services
The Customers & Revenue Geography
The company’s customers are primarily in the consumer, small and mid-sized business, education, enterprise and government markets.
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- $116,914 - Americas
- $60,288 - Europe
- $43,678 - Greater China
- $21,506 - Japan
- $17,788 - Rest of Asia Pacific
Distribution Channels
Apple sells its products and resells third-party products in most of its major markets directly to consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force. The company also employs a variety of indirect distribution channels, such as third-party cellular network carriers, wholesalers, retailers and resellers.
Sources: Apple Inc.s 10K & Bloomberg
SWOT Analysis
Strengths
• Innovative and quality products, since its beginnings Apple has provided top of the line products to its consumers
• Loyal customer base
• Brand value and reputation
• Simple and easy to use products
• Exceptional advertising and marketing
Weaknesses
• Narrow product line
• High customer expectations
• High pricing
Opportunities
• Become a leader in the distribution industry
• Electric cars project
Threats
• Competition on all fronts, almost every product Apple has is in direct competition with a major company
• Loss of quality, many consumers base their decision making off the last product that was released so one bad product could seriously hurt the company (Samsung note catching fire)
Source: marktingtutor.net
Disclaimer
The Workday Cafe is not a registered investment, legal or tax advisor or a broker/dealer. All investment/financial opinions expressed by The Workday Cafe are from the personal research and experience of the evaluator and are intended for informational purposes only. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.