Apple AAPL
What does Apple do?
Apple designs, has manufactured through contract manufacturers, and sells smartphones, computers, tablets, as well as wearables and accessories. Its offering includes iPhone, Mac and iPad, as well as products such as AirPods, Apple Watch, Apple TV, HomePod and Apple Vision Pro. Hardware, operating systems and services are closely integrated and form a closed ecosystem.
The company earns money on one hand from selling devices to consumers, businesses, educational institutions and public-sector buyers, and on the other from services. These include the App Store, cloud services, AppleCare, payment services, streaming offerings, as well as advertising and licensing agreements with third parties. Competitively, Apple operates in the premium segment and relies on brand strength, in-house chip development and high customer loyalty. Competitors include Samsung, Google with the Android ecosystem, and Microsoft, as well as numerous PC and device makers. Products are distributed through its own stores, the online shop, mobile carriers and retail partners.
Score profile
Rank vs. Technology (300 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Apple ranks above average in the group Technology (7.9/10). On growth, the company ranks in the middle in the group Technology (4.5/10). On valuation (higher = cheaper), the stock ranks in the bottom fifth in the group Technology (1.4/10). On financial strength, Apple ranks below average in the group Technology (2.5/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 33.0x | 16.5x | better than 9 % |
| Trailing P/E | 38.8x | 30.3x | better than 37 % |
| PEG ratio | 2.8x | 1.2x | better than 13 % |
| EV/EBITDA | 29.9x | 17.0x | better than 22 % |
| Price/sales | 10.6x | 3.4x | better than 12 % |
| Price/book | 45.2x | 4.3x | better than 1 % |
| Revenue growth | 11.7% | 13.4% | better than 43 % |
| Earnings growth | 14.1% | 18.2% | better than 48 % |
| Gross margin | 48.8% | 53.3% | better than 43 % |
| Operating margin | 31.1% | 14.0% | better than 87 % |
| Net margin | 27.6% | 9.4% | better than 89 % |
| Return on equity | 142.3% | 12.3% | better than 98 % |
| Debt/equity | 84.3% | 40.3% | better than 26 % |
| Current ratio | 1.0x | 1.7x | better than 16 % |
| Free cash flow yield | 2.1% | 3.5% | better than 33 % |
| Dividend yield | 0.3% | 1.1% | – |
| Payout ratio | 11.8% | 26.9% | – |
| Beta | 1.09 | 1.23 | – |
Valuation: what is Apple worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Apple a model range of 156.68 USD to 247.04 USD per share.
40 analysts, average rating “Buy”, average price target 340.77 USD (−2.3%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Sales of the iPhone, the most important product line, largely determine revenue and utilization across the entire supply chain.
- A large installed device base generates recurring revenue from the App Store, cloud, subscriptions and advertising.
- A strong brand, pricing power and in-house chip development support margins in the premium segment.
Risks
- Regulatory intervention in App Store fees and market practices could weigh on the high-margin services business.
- Manufacturing is concentrated in a few regions, so trade disputes, tariffs and supply chain disruptions have a particularly strong effect.
- Dependence on the iPhone and on product cycles makes the business vulnerable to demand weakness and pressure to innovate.
What to look for with Apple
The share and growth of the services business in total revenue are revealing, as this segment offers higher margins and more predictable revenue than device sales.