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Avi Fogel
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Avi is a board member at New York Angels, and runs its education committee. He's also a board member at the Israel Venture Network (IVN), a social venture / philanthropy organization, a board member at Localytics - a leading mobile app analytics company and a board member at CoursHorse - a NYC... More
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  • Apple (AAPL) – Comparing Fundamental Valuation To GOOG, QCOM, AMZN – As Of 1/7/13 Close 0 comments
    Jan 8, 2013 3:55 PM | about stocks: AMZN, GOOG, QCOM, AAPL

    Given the recent rout to Apple (NASDAQ:AAPL) shares it may be valuable to compare the fundamentals based valuations for AAPL with 3 of its peers:

    · Google (NASDAQ:GOOG) - competing in some of the same markets (smartphones, tablets, cloud services, music downloads, TV set-top boxes and others)

    · Qualcomm (NASDAQ:QCOM) - supplying communication chips for smartphones and tablets from Apple and others

    · Amazon (NASDAQ:AMZN) - competing with Apple in tablets, content (book, music, movie) services, cloud services

    Enclosed below is a table summarizing key fundamental metrics.

    Wherever possible instead of using regular P/E, we use PLC (price per share less cash per share)/E.

    Most numbers are based on current values on Yahoo Finance. Apple's cash per share is from Apple most recent earnings release, as the number on Yahoo is incorrect.

     

     

     

    Market Cap

    Price

    Cash/share

    Diluted EPS

    PLC/E

    Diluted EPS

    PLC/E

    Diluted EPS

    PLC/E

    Growth

    PEG

    Growth

    PEG

    Rev ($B)

    Price to

    EBITDA ($B)

    Price to

     
     

    1/7/13 Close

    1/7/13 close

     

    TTM (9/30)

    TTM

    12/31 - cons

    12/31 - cons

    FTM

    FTM

    2012

    TTM

    Next 5 yrs

    FTM/5 yr

    TTM

    Sales (NYSE:TTM)

     

    EBITDA

     
     

    $B

    $

    $

    $

     

    $

     

    $

     

    %

     

    %

     

    $B

     

    $B

      

    AAPL

    $492.30

    $523.90

    $127.61

    $44.15

    8.98

    $43.61

    9.09

    $48.72

    8.13

    10.40

    0.86

    20.67

    0.39

    $156.51

    3.15

    $58.52

    8.41

     
     

    AMZN

    $121.60

    $268.46

    $11.59

    $0.08

    3,210.88

    ($0.02)

    (12,843.50)

    $1.74

    147.63

    (102.00)

    (31.48)

    32.54

    4.54

    $57.26

    2.12

    $2.09

    58.18

     
     

    GOOG

    $241.43

    $734.75

    $135.80

    $31.91

    18.77

    $32.94

    18.18

    $46.31

    12.93

    10.50

    1.79

    13.44

    0.96

    $47.54

    5.08

    $15.85

    15.23

     
     

    QCOM

    $109.07

    $64.01

    $7.26

    $3.51

    16.17

    $3.66

    15.51

    $4.31

    13.17

    16.20

    1.00

    14.68

    0.90

    $19.12

    5.70

    $6.66

    16.38

     
     

    So what does all this mean?

    The following shows 4 of the fundamental metrics above and computes what the AAPL price per share would be if it were based on the metrics of its peers.

     

     

    AAPL's price if it had

              
                

    GOOG PLC/E

    $1,096

    GOOG PLC/E (ftm)

    $833

    GOOG PEG/FTM (5 yr)

    $1,281

    GOOG Price/EBITDA

    $949

    QCOM PLC/E

    $944

    QCOM PLC/E (ftm)

    $848

    QCOM PEG/FTM (5 yr)

    $1,194

    QCOM Price/EBITDA

    $1,020

    AMZN PLC/E

    $187,410

    AMZN PLC/E (ftm)

    $9,508

    AMZN PEG/FTM (5 yr)

    $6,040

    AMZN Price/EBITDA

    $3,623

                
                

    Average price for AAPL based on the 4 metrics above

    GOOG

    $1,040

          

    Average price for AAPL based on the 4 metrics above

    QCOM

    $1,001

          

    Average price for AAPL based on the 4 metrics above

    AMZN

    $51,645

          

    So average price based on the metrics used for GOOG and QCOM would be approximately $1,000 and for AMZN's outlier valuation metrics the incredible value of AAPL would be over $50,000/share.

    So expect some reversion to the mean for both AAPL and AMZN, although as the adage goes, the market can stay unreasonable longer than we can stay solvent……

    Disclosure: I am long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: My long position in AAPL is using mid-term call options

    Themes: long-ideas Stocks: AMZN, GOOG, QCOM, AAPL
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