You have to give credit where it’s due. AAPL’s Q1 2015 quarter shows the awesome strength of its business model with sales of over 75 million of its flagship iPhone as the impact of its latest product upgrade shines through. The graphs below show revenues by region and by product using their new reporting segments.
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These results illustrate the folly in trying to make projections for Apple past a few quarters (as I attempted to do previously in posts like this). As analysts scramble to update their targets, I wanted to get a feel for what an AAPL price of $120 looked like in terms of historical and the current forward PE (excluding net cash). Using my estimates for EPS over the next 7 quarters and the average analyst estimate, the current price around $120 looks reasonable, as the graph below shows.
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Anything significantly above the current price assumes that Apple’s awesomeness will continue over the next 2 years. There is little doubt that Tim Cook has now stepped out of Steve Job’s shadow. The next tests will be the launch of the Watch and the development of iPay. Continuing the awesomeness beyond the current iPhone upgrade cycle maybe too big an ask, even for Cook. Then again, based upon the recent results and my track record on AAPL, what do I know……
This blog represents my personal views and is not reflective of the views or opinions held by any company or employer I work for currently or have worked for in the past. The views expressed herein are based solely upon publicly available data. No views expressed herein should be taken as an endorsement to take any particular course of action in the markets. The basis of this blog is that different views should be expressed and readers make up their own minds on the what they believe and act accordingly.
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