Nearing $500, Apple Stock’s PE Now Below 12: Let’s Comparison Shop, Shall We?
The descent of Apple (AAPL) shares continues, as if it were a flimsy momentum stock suddenly discovered to be full of hype, rather than a conservatively priced mega-cap. Maybe it’s the brilliantly funny Samsung ad doing Apple in.
Regardless, the stock could fall below $500, and with a current PE ratio of less than 12, YCharts decided to look at other big-cap companies priced similarly, and see if they seem more attractive than Apple. Yes, we did this stock comparison less than a month ago, when Apple fell to $600, but with all the jabbering going on we thought it’s worth repeating.
Bear in mind Apple’s steep growth in revenue and its generally widening profit margin.
The only one with a notably widening profit margin is U.S. Bancorp, and of course it’s a bank coming out of the financial crisis, so that’s not a long-term trend.
Yes, Apple’s margin narrowed a tad recently, and competition will likely squeeze it more in years to come. Sellers, though, seem think it should be priced as a no/slow-growth company with middling margins. Or perhaps the entire market is over-priced, and Apple stock is ahead in reflecting that sentiment.
Jeff Bailey is the editor of YCharts, which includes the just-released YCharts Pro Platinum for professional investors.