The valuation of NASDAQ: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, NASDAQ: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 NASDAQ:AAPL
Thank you for your valuable contribution to the TradingView community and keep up the good work!
Pandorra
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Thank you Tim for your wonderful contributions to financial analysis. I wish to see quality research selected by TV editors as often as possible in the future, as it is a truly valuable way to find stocks of your dream. I've just remembered how ridiculously stupid Supermicro's shares were priced for a long time. while the financials were getting better, saying come on baby, try me, try me now.
basictradingtv
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Great overview Tim. But this doesn't necessarily mean that Apple will drop from here. It can become even more expensive💰💰
boji1
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Thank you, I intend to give it a try and appreciate you sharing with the community. Looks like smart work!
DemoDiaryFX_Trading
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thanks for your work!!
arvine11
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bravo bro
Superchip1979
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So do you think apple has had its best days
timwest
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@Superchip1979, What I am suggesting is the risk of buying AAPL here is many multiples higher then when it was cheaper. Maybe that is a cop-out, but the point is that you don't have any room for error here with Apple and if things aren't as rosy as people are hoping then it is a long way down to find the bottom. If you already own Apple shares, this is a great time to sell calls for as long as possible and capture all of your upside potential in advance for as long as possible (Use long term AAPL calls, for example). You can earn double-digit returns per year even if Apple goes sideways over the next two years.
ColoRider
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@timwest, Thanks for your analysis. I am not a trader but I'm now curious to learn how to sell long-term calls. Will try to learn.
Thank you for your valuable contribution to the TradingView community and keep up the good work!