Value Investing with Sven Carlin, Ph.D.|02. Juli
Apple Stock is Very Risky
Apple Stock: High Risk Despite Impressive Past
Good day, fellow investors. This video analyzes Apple's current valuation and concludes that despite solid business figures, the stock is significantly overvalued and carries high risk.
Key Metrics
- Price-to-Earnings (P/E) Ratio: Very high.
- Dividend Yield: Very low.
- Earnings Growth: 22% in the last quarter, but lower over the past 5 years overall.
Analyst's Intrinsic Value Calculation
- Conservative Scenario: Assuming 7% earnings growth and a terminal P/E of 20, the intrinsic value is 40% below the current price.
- More Optimistic Scenario: Even with 12% growth and a terminal P/E of 25, the stock is 33% overvalued.
- Pure Value Scenario: With only 5% growth and a terminal P/E of 12, the investment could lose over 60% of its value, similar to the analyst's entry in 2016 at a P/E of 10.
Risk Factors
- Artificial Price Drivers: The price increase is heavily driven by buybacks ($100-200 billion) and passive fund inflows, not fundamental growth.
- Future Earnings Growth: Analysts expect only single-digit growth going forward.
- Comparison with Warren Buffett: Buffett's Berkshire has already started selling Apple shares – a clear sign of overvaluation.
- Economic Sensitivity: A bad iPhone launch, a recession, or a general downturn could cause a massive price drop.
Conclusion: The analyst recommends selling (
