APPLE STOCK

Fiscal 3Q 2022 Final Estimates


As of Friday’s closing price of $154.09, AAPL trades at a 21.9x multiple on my NTM EPS estimate (21.3x when excluding NTM net cash and dividends).

Trimmed revenue projection by 2-3%, partially offset by slightly more patient opex intensity, still results in long-term EPS growth trajectory holding up at high single-digits, so the 24x projected valuation remains valid, even conservative. The recent market price dip to low-20s multiple offers the now rare opportunity of an average quarterly price below my “fair” (or forward) valuation level (thus the blue dashed line in the chart below), something which used to be the case at all times from late 2008 to early 2017 but has only happened once (Jan-Feb 2019) in the last 5 years. Even after a 20% rebound from recent lows, this still seems an exceptional opportunity for long-term investors. As always, I could be wrong, so do your own due diligence and decide according to your particular risk-tolerance profile.

Detailed estimates:

3mo ending Jun22  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   82.6     -  1.16
My estimates       83.9  43.4  1.22 (16.31b shares)


3mo ending Sep22  Rev$B   GM%  $EPS
----------------  -----  ----  ----
Analysts consens   89.9     -  1.32
Apple gde lo (e)   87.0  42.5  1.25*
Apple gde hi (e)   92.0  43.5  1.40*
My estimates       92.2  43.4  1.42 (16.18b shares)

*EPS guidance ranges derived from other figures provided
 by Apple and diluted shares outstanding estimated by me


12m ending Sep23  Rev$B  $EPS
----------------  -----  ----
Analysts consens  414.8  6.51
My estimates      434.1  7.17


Valuation
Timeframe  NTMfrom  $EPS  Y/Y  Mult  Val   $*   Div  Tot
---------  -------  ----  ---  ----  ---  ---  ----  ---
Trail Val  Jul2021  6.08  19%  20.8  126  3.9  0.89  131
Frwrd Val  Jul2022  7.04  16%  22.9  161  3.5  0.94  166
1y Target  Jul2023  7.60   8%  23.7  180  2.6  1.03  184
2y Value!  Jul2024  8.35  10%  23.9  200  1.8  1.15  203

*Cash per share balance net of debt and commercial paper

(click to enlarge)


F3Q22 Statements of Operations Revenues F3Q22e F3Q21 Y/Y% -------- ------- ------- ----- iPhone 37,932 39,570 -4.1 Mac 9,123 8,235 10.8 iPad 7,454 7,368 1.2 W/H/A 9,280 8,775 5.8 -------- ------- ------- ----- Products 63,788 63,948 -0.3 Services 20,114 17,486 15.0 -------- ------- ------- ----- Tot Revs 83,902 81,434 3.0 Gross Margin Breakdown -------- ------- ------- ----- Products 21,932 23,049 -4.8 Services 14,478 12,206 18.6 -------- ------- ------- ----- Tot GM 36,411 35,255 3.3 -------- ------- ------- ----- Prod GM% 34.4% 36.0% -1.7 Svcs GM% 72.0% 69.8% 2.2 -------- ------- ------- ----- Tot GM% 43.4% 43.3% 0.1 Op Expns 12,752 11,129 14.6 -------- ------- ------- ----- OpIncome 23,658 24,126 -1.9 Op Mrgn% 28.2% 29.6% -1.4 OIE 115 243 -52.7 -------- ------- ------- ----- Pre-Tax 23,773 24,369 -2.4 Tax Rate 16.0% 10.8% 5.2 Tax Prov 3,804 2,625 44.9 -------- ------- ------- ----- Net Incm 19,969 21,744 -8.2 Net Mrg% 23.8% 26.7% -2.9 Dil Shrs 16,311 16,782 -2.8 -------- ------- ------- ----- EPS $1.22 $1.30 -5.5 Amounts in millions except EPS in dollars and ratios in %



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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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