Apple Valuation Graphed to 2009

The valuation of AAPL shares is always an interesting challenge and historically you can view the range of valuation that Apple shares have traded at using the powerful tools that TradingView has for you.

Here is a template you can easily make a copy of using the "share" button at the bottom of the graph. Once you click "share" you will see a "make it mine" button to click on an make yourself a copy to use as a template for your other stocks.

This is a powerful way to view your companies you invest in and see how they are valued.

1. Free cash flow
2. PS Ratio (How many times the annual revenues of the company is the market capitalization of the equity)
3. Shares Outstanding (Very important to know if a company is giving shares away to employees each year creating a drag on the earnings or are they buying back stock with borrowed money. Better yet, are they retiring stock with free cash flow.)
4. Long term debt (See above) Is the company borrowing more and more to grow and putting itself at risk
5. Total Revenue (Not inflation adjusted)
6. Market Capitalization (Value of stock only, not enterprise value which includes debt)

When we look at Apple shares here historically, the valuation is higher than average with lower than average sales growth. Compare today's prices to the low prices of 2013-2016-2018/2019 you can see you could buy Apple at 2.13, 2.20, 2.68 times sales with sales growing at sharply higher rates versus now with sales growing at the slowest rate with a peak in valuation at 8.02 times sales.

So, in effect, AAPL is significantly more expensive relative to low valuation levels.

Valuation isn't a timing mechanism for entering and exiting stocks but you can use it to understand the relative valuation of stocks in your portfolio and the investible universe of stocks.

Knowledge is power and this data at least helps you to point out the downside risk to previous low valuation cycles.

Cheers,

Tim

Friday, February 9, 2024 11:54AM EST
$189.67 last AAPL