Apple Inc.(NASDAQ:AAPL), which recently became the most valuable U.S. company in company overtaking Exxon Mobil and braking the record previously held by Microsoft, has still room for further upsides as its valuation is still low.
Data shows that the company is trading at a price to earnings ratio that is at a discount to the Nasdaq Composite Index. Compared to an average of 16.5 times for the constituents in the index, the Apple stock is trading at 15.4 times its 12-month forward earnings.
Shares of AAPL retreated 0.93% to $662.63 in Thursday’s session with a market cap of $627 billion, besting the record it created a couple of days back.
Can AAPL Hit $1000 Mark By This Year? Find Out Here
There is still a lot of steam left in the stock because it has a slew of products lined up in the remaining part of the year, which has not yet been fully factored into its price.
The lower price to earnings multiple has to be understood in the context that the company's share performance has always lagged its profit growth.
Bloomberg' analysis showed that while the stock has jumped more than 80-fold in the past decade, earnings have gained more than 300-fold to $28.05 a share last fiscal year from 9 cents in 2002.
That’s a stupendous performance by any yardstick!
The company has $117.2 million in cash reserves and Chief Executive Tim Cook has already indicated that he intends to grow in existing areas such as mobile devices while getting
into new ones like television.
meanwhile here's an interesting story from TechCrunch which says that a Verizon employee has just confirmed that the company is having an all-staff vacation blackout from September 21 to 30.
TechCrunch has interpreted this to mean that the new Apple iPhone - iPhone 5 - will be available in stores starting from September 21, which falls on a Friday.
Apple is expected to announce the launch of its much-awaited next generation iPhone on September 12 and the sales are expected to start shortly after that.
TechCrunch has done an analysis of the timelines from Apple's announcement of its new products to the time of actual availability in the stores and is confident the phones will be available in a week from the announcement.