Morningstar

Apple Inc AAPL

Morningstar Rating
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Stock XNAS Rating as of
$227.79 +0.27 (0.12%)
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As of Delayed Price Post-Trading: $227.49 −0.29

Company Report

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Apple: iPhone 16 Event Affirms Our Confidence in Strong Fiscal 2025 Growth Despite Overvalued Shares

William Kerwin

We keep our $185 per share fair value estimate for wide-moat Apple after an impressive fall product event aligned with our long-term expectations. We continue to see Apple as a differentiated consumer technology provider with tight integration between its hardware and software driving a wide economic moat. The iPhone is the linchpin of this ecosystem. We were pleased with the new iPhone 16 lineup and believe these models will spur a strong growth cycle for Apple in fiscal 2025 as consumers look to use generative artificial intelligence features. Still, we believe overly bullish expectations are baked into Apple’s stock price. To us, investors would need to expect 20% iPhone revenue growth in fiscal 2025 to justify the firm’s current valuation. Our own forecast is closer to 10% iPhone revenue growth in fiscal 2025, and we see shares as overvalued.

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Price vs Fair Value

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AAPL is trading at a 723% premium.
Price
$227.52
Fair Value
$131.00
Uncertainty
Medium
1-Star Price
$882.64
5-Star Price
$181.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Apple offers an expansive ecosystem of tightly integrated hardware, software, and services, which locks in customers and generates strong profitability.

Bears

Apple is prone to consumer spending and preferences, which creates cyclicality and opens the firm up to disruption.

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News

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Trading Information

Previous Close Price
$227.52
Day Range
$227.30–229.52
52-Week Range
$164.08–237.23
Bid/Ask
$227.41 / $227.50
Market Cap
$3.46 Tril
Volume/Avg
34.0 Mil / 55.7 Mil

Key Statistics

Price/Earnings (Normalized)
34.63
Price/Sales
9.15
Dividend Yield (Trailing)
0.43%
Dividend Yield (Forward)
0.44%
Total Yield
3.06%

Company Profile

Apple is among the largest companies in the world, with a broad portfolio of hardware and software products targeted at consumers and businesses. Apple’s iPhone makes up a majority of the firm sales, and Apple’s other products like Mac, iPad, and Watch are designed around the iPhone as the focal point of an expansive software ecosystem. Apple has progressively worked to add new applications, like streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors while working with subcontractors like Foxconn and TSMC to build its products and chips. Slightly less than half of Apple’s sales come directly through its flagship stores, with a majority of sales coming indirectly through partnerships and distribution.
Sector
Technology
Industry
Consumer Electronics
Stock Style Box
Large Core
Total Number of Employees
161,000
Website
https://www.apple.com

Competitors

Valuation

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Metric
AAPL
GOOGL
005930
Price/Earnings (Normalized)
 34.6323.1815.73
Price/Book Value
 51.926.671.17
Price/Sales
 9.156.241.36
Price/Cash Flow
 28.9216.936.40
Price/Earnings
AAPL
GOOGL
005930

Financial Strength

Metric
AAPL
GOOGL
005930
Quick Ratio
 0.801.901.80
Current Ratio
 0.952.082.58
Interest Coverage
 —281.7729.22
Quick Ratio
AAPL
GOOGL
005930

Profitability

Metric
AAPL
GOOGL
005930
Return on Assets (Normalized)
 32.63%26.65%6.04%
Return on Equity (Normalized)
 165.40%37.68%7.81%
Return on Invested Capital (Normalized)
 63.09%33.14%6.57%
Return on Assets
AAPL
GOOGL
005930

Consumer Electronics Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Sony Group Corp
SNEJF
—Tpgy$119.0 Bil
 Sony Group Corp ADR
SONY
BbjxtgjrWnlkg$119.0 Bil
 Xiaomi Corp Class B
XIACF
—Bdqy$68.9 Bil
 Xiaomi Corp ADR
XIACY
—Fdkc$68.9 Bil
 Panasonic Holdings Corp ADR - Unsponsored
PCRHY
—Gslw$20.7 Bil
 Panasonic Holdings Corp
PCRFF
—Bnb$20.7 Bil
 LG Display Co Ltd ADR
LPL
—Nfgf$4.4 Bil
 Sharp Corp
SHCAF
—Hjwr$4.2 Bil
 Sharp Corp ADR
SHCAY
—Pcfcf$4.2 Bil

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