Analysis Of Apple Inc. (AAPL)
Detailed Apple Inc. (AAPL) stock analysis covering financial health, valuation, growth potential, leadership, risks, and investment outlook. Is AAPL a buy, sell, or hold
Jul 06, 20251.5K Shares69.3K Views
Section 1: Company Overview
1. Main Products/Brands
- iPhone: Sales = $213.00b (65% of total revenue), Profit = $53.25b (est.)
- Services: Sales = $78.00b (24% of revenue), Profit = $27.30b (est.)
- Mac: Sales = $34.00b (10% of revenue), Profit = $10.20b (est.)
- Wearables, Home, Accessories: Sales = $40.00b (12% of revenue), Profit = $8.00b (est.)
- iPad: Sales = $25.00b (8% of revenue), Profit = $5.00b (est.)
- Certainty: 70% (Apple does not disclose profit per product line; estimates are based on gross margins)
2. Market Cap: $3,200.00b (as Of March 2025)
Certainty: 60% (projected based on historical trends; market volatility affects accuracy)
3. P/E Ratios
- Trailing P/E: 28.5x
- Forward P/E: 25.0x
- Certainty: 80% (based on 2024 earnings)
4. Liquidation Value Vs Market Cap: Liquidation Value Estimated At $500.00b Vs. $3,200.00b Market Cap
Certainty: 60% (assumes asset fire-sale; excludes intangible value)
5. Book Value/Market Cap: $150.00b / $3,200.00b = 4.7%
Certainty: 70% (book value excludes brand equity)
6. Debt To Market Cap: $110.00b / $3,200.00b = 3.4%
Certainty: 75% (Apple maintains low leverage)
7. Cash - Debt And Cash Ratio To Market Cap: ($60.00b - $110.00b) / $3,200.00b = -1.56%
Certainty: 70% (net debt position)
8. Profit Margins
- Net Profit Margin: 24%
- Operating Margin: 30%
- Certainty: 85% (consistent historical margins)
9. Profit Before R&D Vs Market Cap: $126.00b / $3,200.00b = 3.94%
Certainty: 65% (R&D treated as an expense)
10. Profit Vs Market Cap: $100.00b / $3,200.00b = 3.12%
Certainty: 80% (trailing 12-month net income)
Section 2: Growth And Valuation
1. Expected Growth
- Short-term (2025): 5-7% revenue growth (services drive expansion)
- Long-term: 3-5% (maturing hardware market)
- Certainty: 70% (depends on innovation)
2. 10-Year Valuation: $4.5T (bull Case) Vs. $2.5T (bear Case)
Certainty: 50% (long-term uncertainty) [[6]]
3. Years To Recoup Investment: ~20 Years (assuming 5% Annual Profit Growth)
Certainty: 40% (premium over book value complicates ROI)
4. ROI: 5-7% Annually (low Due To High Market Cap)
Certainty: 40% (sensitive to growth assumptions)
5. Future Goals
- AR/VR Headset Launch: 60% success probability (moderate profit impact)
- Autonomous Vehicles: 30% success probability (high risk, high reward)
- Certainty: 60% (R&D timelines uncertain)
Section 3: Leadership And Ethics
1. CEO Ethics: Tim Cook Has No Major Controversies
Certainty: 80% (reputation intact)
2. Ethical Accounting: GAAP-compliant; Minor Concerns Over Supply Chain Audits
Certainty: 70% (audits show compliance but limited transparency)
4. History Of Fraud: None
Certainty: 90% (strong governance track record)
Section 4: Operational Efficiency
1. AI Advantages: Improved Siri, Camera Features, And Supply Chain Optimization
Certainty: 70% (incremental gains)
2. Main Risks: China Supply Chain Disruptions, Regulatory Scrutiny
Certainty: 80% (well-documented risks)
3. Altman Z-Score: 3.2 (safe Zone)
Certainty: 70% (strong liquidity)
4. Piotroski F-Score: 8/9 (strong Financial Health)
Certainty: 70% (consistent profitability)
5. GAAP Compliance: Full Compliance
Certainty: 90% (audited reports)
Section 5: Ownership And Sentiment
1. CEO Ownership: 0.02% ($640M)
Certainty: 80% (SEC filings)
2. FCF: $100.00b (stable)
Certainty: 80% (recurring services revenue)
3. ROIC: 30% (High Efficiency)
Certainty: 75% (capital allocation strength)
4. Sentiment: Positive Customer Loyalty; Mixed Investor Sentiment (valuation Concerns)
Certainty: 70% (survey data)
Section 6: Historical Performance
- Revenue Growth: 5-10% annually (2022-2024)
- Margin Trends: Stable at 24-26% net margin
- Certainty: 85% (audited financials)
Section 7: Final Evaluation
1. Scoring (0-10)
- Financial Health: 8/10
- Growth Potential: 7/10
- Risk Profile: 6/10
- Leadership: 8/10
- Competitive Position: 9/10
- Weighted Score: 7.5/10
2. Final Recommendation: Hold
- Rationale: Strong fundamentals but limited upside at current valuation
- Bias Check: Adjusted score from 7.5 to 7.0 (overrating brand resilience)
3. Premium/Discount: Undervalued If Service Growth Exceeds 10% Annually
- Data Sources: Morningstar, SEC filings, historical trends
- Uncertainty Handling: Bolded items reflect <50% certainty
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