Evaluating Apple (AAPL) Valuation After Recent Mixed Share Price Performance

Apple’s recent share performance in context

Apple (AAPL) has drawn fresh attention after a mixed stretch in its share performance, with gains over the past year alongside negative returns over the past month and past three months.

See our latest analysis for Apple.

Recent trading shows some loss of momentum, with a 7 day share price return of 4.74% and a 30 day share price return of 8.61% pulling back from a stronger 1 year total shareholder return of 11.14%.

If Apple’s recent moves have you reassessing your tech exposure, it could be a good moment to scan other high growth tech and AI stocks that fit your outlook.

With Apple trading at $247.65, a value score of 1, and mixed short term returns alongside a 1 year total shareholder return of 11.14%, is this weakness a fresh entry point, or is future growth already fully priced in?

Price-to-Earnings of 32.5x: Is it justified?

Apple currently trades on a P/E of 32.5x, which prices its earnings at a premium compared to peers, even after the recent share price pullback.

The P/E ratio compares the share price to earnings per share, so a higher multiple often reflects strong profitability, consistent results, or expectations for future earnings strength.

For Apple, the market appears to be paying up for earnings quality and growth. Earnings grew 19.4% over the past year, ahead of the Tech industry’s 10.9%, and management has converted that into a net profit margin of 26.9%, up from 24% last year. Our fair P/E estimate of 37.2x is materially higher than the current 32.5x. This difference suggests there could be scope for the multiple to move closer to that fair level if current trends in earnings quality and growth persist.

Set against wider peers, though, the premium is clear. Apple’s 32.5x P/E is higher than the peer average of 31.3x and well above the Global Tech industry’s 22.7x, so investors are paying a higher price per dollar of earnings than for many other tech names.

Explore the SWS fair ratio for Apple

Result: Price-to-Earnings of 32.5x (ABOUT RIGHT)

However, the richer 32.5x P/E and recent 30 day and 90 day share price declines mean any disappointment around earnings quality or demand across Apple’s hardware and services could quickly pressure that premium.

Find out about the key risks to this Apple narrative.

Another view: cash flows tell a different story

While the 32.5x P/E looks roughly in line with Apple’s earnings strength, our DCF model points in the opposite direction. On that view, Apple’s current share price of $247.65 sits above an estimated future cash flow value of $225.98, so the stock screens as overvalued on this method.

That gap is not huge, but it does suggest less room for error if growth or margins soften. If one model points to “about right” and another leans to “too rich”, which one do you trust most when real cash is on the line?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Apple for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 881 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Apple Narrative

If you see the numbers differently or would rather test your own assumptions, you can build a personal view of Apple in just a few minutes with Do it your way.

A great starting point for your Apple research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Apple is only one piece of your portfolio puzzle, do not stop here. Put Simply Wall Street’s screener to work and line up your next ideas before everyone else does.

• Target potential mispricing with these 881 undervalued stocks based on cash flows to find companies where current prices differ from their underlying cash flow profiles.
• Explore major technology shifts by checking out these 23 AI penny stocks that tap into artificial intelligence themes across different sectors.
• Review these 13 dividend stocks with yields > 3% to identify companies offering yields above 3%.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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