Apple’s FQ2 Results: A Different View

  • Posted: 27 April 2010 02:42 AM

    My latest missive at Eventide.

    There’s more to the numbers than hardware unit sales and near-term results:

    “A different approach to viewing the numbers for the March quarter includes looking at the numbers on a multi-year growth plane. In FY ‘09 Apple realized about $43 billion in revenue. As I suggested in early February, Apple will reach $60 billion in revenue this fiscal year. There’s a possibility, if not a probability, Apple will reach $100 billion in annual revenue within two years. The Apple iPad, which has not been a factor in prior quarters, could add 20% to the June quarter’s revenue with rising revenue contributions over the next several quarters.”

    I don’t recall the last time I’ve seen a company of this size with these probable rates of revenue and earnings growth over a two-year future period.

         
  • Posted: 27 April 2010 01:49 PM #1

    I’m finding my estimates of Apple’s forward p/e to be well into the low teens. I can make a strong argument for acquiring AAPL especially at today’s price.

         
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    Posted: 27 April 2010 02:18 PM #2

    Naturally, I agree.  Forward PE is in the teens.  Multi-year sustainability of all Apple current and developing product lines is obvious.  Developing product lines are iPad, iAd, iPhone OS 4 and the mysterious North Caroline data center.  Although iPhone OS 4 is not a big revenue producer in and of itself, millions of people are looking forward to it and therefore are willing to buy iPads, Touches and iPhones now.

         
  • Posted: 27 April 2010 10:16 PM #3

    The revenue and earnings growth trajectory is quite impressive. We are looking at $60 billion in revenue this fiscal year and $100 billion in revenue within two years. With earnings scaling faster than revenue, the shares are looking quite attractive at today’s price.

         
  • Posted: 27 April 2010 11:00 PM #4

    Somewhat related to the topic, I’d appreciate your thoughts:

    What do you think the floor for APPL’s stock price is right now? I foolishly put some cash on the sidelines about a week before iPad launch and have been looking for a chance to get back in, but the stock just keeps going up!

    Is today’s dip my last best chance, or do you think we could pullback even lower?

    I’m almost exclusively a long trader, but I couldn’t resist trying to time some of APPL’s volatility to build my holdings. Sometimes it has worked, this time ? ouch! I’ve spent the better part of April kicking myself for missing this spurt.

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  • Posted: 28 April 2010 12:32 AM #5

    rale - 28 April 2010 02:00 AM

    Somewhat related to the topic, I’d appreciate your thoughts:

    What do you think the floor for APPL’s stock price is right now? I foolishly put some cash on the sidelines about a week before iPad launch and have been looking for a chance to get back in, but the stock just keeps going up!

    Is today’s dip my last best chance, or do you think we could pullback even lower?

    I’m almost exclusively a long trader, but I couldn’t resist trying to time some of APPL’s volatility to build my holdings. Sometimes it has worked, this time ? ouch! I’ve spent the better part of April kicking myself for missing this spurt.

    I’m not a market timer so please don’t consider this any kind of investment advice.

    I see Apple at over $400 by the end of next April and over $300 by the end of July. I can’t forecast what might happen day to day or week to week, but I see the long-term trend as up. In other words I see today’s price as a buying point and wouldn’t personally try and time the market or AAPL in particular.

         
  • Posted: 28 April 2010 01:12 AM #6

    Thanks, DT. I may just have to bite the bullet and take my losses for the month, with the steadfast faith that they shall be recouped in time.

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  • Posted: 28 April 2010 01:49 AM #7

    While the short-term direction of the overall market and the swings in AAPL over short periods can’t be forecast, I stand by my blog post.