Current Analyst Estimates - Discounted Cash Flow Valuation

  • Posted: 18 September 2010 03:53 PM #16

    turonm, welcome to the AFB!  grin

         
  • Posted: 18 September 2010 03:56 PM #17

    jeffi - 18 September 2010 12:35 PM

    It would be illuminating if you also generated a valuation analysis based on DT?s growth rates (or any of the other often quoted AFB posters).

    The earnings estimates used in the examples are conservative. However, using conservative estimates it illustrates the how much AAPL is currently undervalued. This makes AAPL attractive at the current valuation even for conservative investors. Already AAPL should be trading at well over $300 per share. For those looking for a solid long-term investment with the prospects or a very attractive short-term return, AAPL should be at the top of the list.

         
  • Posted: 18 September 2010 04:15 PM #18

    turonm - 18 September 2010 11:14 AM
    danthemason - 18 September 2010 11:01 AM

    Cash Valuation for Sept.11 seems low/wrong.

    Thanks for that observation, I should have included that the model assumes full free-cash flow re-investment, from the present.  This may seem idealistic, however given the current cash position of AAPL, I believe it is a fair long-run assumption.


    Full free cash re-investment in what?

         
  • Posted: 18 September 2010 04:20 PM #19

    danthemason - 18 September 2010 07:15 PM
    turonm - 18 September 2010 11:14 AM
    danthemason - 18 September 2010 11:01 AM

    Cash Valuation for Sept.11 seems low/wrong.

    Thanks for that observation, I should have included that the model assumes full free-cash flow re-investment, from the present.  This may seem idealistic, however given the current cash position of AAPL, I believe it is a fair long-run assumption.


    Full free cash re-investment in what?

    Apple.

         
  • Posted: 18 September 2010 05:13 PM #20

    jeffi - 18 September 2010 01:08 PM

    I do think that Apple’s stock priced is depressed on a valuation basis in part because of misinformation or bad research on WS. Therefore, only showing projections based on shoddy work only perpetuates and extends the damage (garbage in, garbage out).

    Analysts are still playing catch-up on estimates and price targets.

    The challenge confronting analysts is the Apple iPad may represent as much as 25% of Apple’s revenue haul in FY 2011 yet there’s little empirical data upon which to develop estimates. That will change following the September quarter results. Watch for the share price to rise in response not only to the September quarter’s results but due to significant upward revises to FY2011 estimates and price targets once data is available on iPad unit sales.

         
  • Posted: 18 September 2010 06:25 PM #21

    turonm - 18 September 2010 07:20 PM
    danthemason - 18 September 2010 07:15 PM
    turonm - 18 September 2010 11:14 AM
    danthemason - 18 September 2010 11:01 AM

    Cash Valuation for Sept.11 seems low/wrong.

    Thanks for that observation, I should have included that the model assumes full free-cash flow re-investment, from the present.  This may seem idealistic, however given the current cash position of AAPL, I believe it is a fair long-run assumption.


    Full free cash re-investment in what?

    Apple.

    Your fair long term assumption is for the largest tech company on the planet. They have self financed the last 7 years of unparalleled growth and done it while accumulating over 45 billion dollars in cash and securities. Who sees the need for the cash flow next year to finance growth or operations?

         
  • Posted: 18 September 2010 06:40 PM #22

    danthemason - 18 September 2010 09:25 PM
    turonm - 18 September 2010 07:20 PM
    danthemason - 18 September 2010 07:15 PM
    turonm - 18 September 2010 11:14 AM
    danthemason - 18 September 2010 11:01 AM

    Cash Valuation for Sept.11 seems low/wrong.

    Thanks for that observation, I should have included that the model assumes full free-cash flow re-investment, from the present.  This may seem idealistic, however given the current cash position of AAPL, I believe it is a fair long-run assumption.


    Full free cash re-investment in what?

    Apple.

    Your fair long term assumption is for the largest tech company on the planet. They have self financed the last 7 years of unparalleled growth and done it while accumulating over 45 billion dollars in cash and securities. Who sees the need for the cash flow next year to finance growth or operations?

    To be clear, if the long term reinvestment rate were either 0% or 100%, post the Sept 2011 present value, it would make no difference, as future cash-flows are discounted back to the present regardless of retention or reinvestment. Change to the 2011 value would only occur if the reinvestment of free cash flow between Sept 2010 and Sept 2011 were to be less that 100%. I really don’t have the will anymore to go over basic Finance theory. It was nice posting here. Good luck.

         
  • Posted: 18 September 2010 07:07 PM #23

    turonm - 18 September 2010 09:40 PM

    I really don’t have the will anymore to go over basic Finance theory. It was nice posting here. Good luck.

    I’m sorry you are choosing to take this approach. No one here needs to be tutored in basic finance or financial theories. However, this is a discussion board, not a monologue board. If you only wish to only converse with yourself, please go elsewhere. If you’re interested in earnest and informed discussions on your posts and the posts of other members you are more than welcome to stay and contribute to the community and take advantage of the knowledge and wisdom shared by all members of the AFB.

         
  • Posted: 18 September 2010 07:19 PM #24

    It’s time to lock the topic. Nothing good will come from the discussions.