According to the latest analyst earnings estimates, Apple's (AAPL) growth rate is expected to fall big time. In fact, it is slated to plunge an alarming 80% in fiscal 2013, from an expected 54% earnings growth rate in 2012 (estimates of $42.73 versus 2011 earnings of $27.68) to only 11% in fiscal 2013 (estimates of $47.44 versus 2012 estimates of $42.73). But hold onto your horses here, because those analyst expectations are deeply sandbagged (the company has managed to crush past estimates by an average of 20% during the last several quarters). So in reality, 2013 earnings will be more like $56.92 (1.20 X $47.44) amounting to a growth rate of 33%, or three times greater than analysts expect.
AAPL is so red hot right now, that the law of large numbers does not even seem to apply to them, especially considering that management loves to underpromise, in order to overdeliver in spectacular fashion (there is no doubt that the analyst community is drinking the Kool-Aid). You would think the analysts by now would catch on to the charade, and juice up their estimates accordingly, but this type of conspiracy has served the shareholders well, so nothing will change in this regard.
A very low multiple: in essence, AAPL is trading at only 8.8 times its more realistic fiscal 2013 earnings estimates of $56.92. If you use today's 14.29 trailing multiple against 2013 earnings, you get a share price of $813, or a market cap near the $1 trillion mark. Further bolstering AAPL's case as a compelling buy, is its incredibly low PEG ratio of .61, making it superior to 99% of all equities in the universe.
Will the share price growth continue at the same pace?: During the last nine years, AAPL shares have appreciated over 5500%, so anybody who purchased $20,000 of shares in May of 2003, has seen those same shares grow to a cool $1 million valuation. Will we get another 5500% bout of appreciation in the next nine years? Probably not (let's not get greedy here), as that would create a market cap of $25 trillion, which would amount to nearly two times our country's national debt. I'd be happy enough if the next nine years saw AAPL's stock appreciation clip fall 98% to 110% (from 5500% to 110%), as that would still be enough to double the shares in the same period, provide an annual return on investment of about 11%, and enable the company to be the first public entity to attain the all elusive $1 trillion market cap milestone.
Disclosure: I am long AAPL.