Charting Apple at $600: a PE Ratio Alongside Tired Old Companies with Flat Sales
Apple’s (AAPL) third-quarter results, and the launch of its junior iPad, apparently underwhelmed investors, as the gadget maker’s stock swooned since mid-September.
Fair enough. A company that has surprised on the upside so many times, and so outlandishly, is bound to disappoint sooner or later. But is this really where Apple belongs trading – alongside, based on its PE ratio, such no-growth companies as pharmaceutical makers Eli Lilly (LLY), Sanofi (SNY) and GlaxoSmithKline (GSK)?
Or how about alongside yesterday’s tech giant, companies milking old franchises but unable to generate substantial sales growth – International Business Machines (IBM), Microsoft (MSFT), Oracle (ORCL)?
Amazon’s (AMZN) recent sales growth is about the same as Apple’s.
But one company builds a wider profit margin from its growth, and one seems to be selling dollar bills for 99 cents apiece:
Either Apple’s prospects are poor, and its stock fairly priced, or all these other companies would seem by comparison overpriced.
From the editors of YCharts, which includes the just-released YCharts Pro Platinum for professional investors.