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APPLE, INC. VALUATION FIN/571: Corporate Finance
Kenneth Baker
Brianna Lynch
December 18, 2023
KEY PERFORMANCE INDICATORS
2
•
Apple, Inc. (AAPL)
•
Key Performance indicators (KPI) •
Definition: A collection of numerical metrics intended to assess the overall long-term performance of an organization. Particularly assist in evaluating a company's operational, financial, and strategic accomplishments, particularly in relation to other companies operating in the same industry (Twin, 2023).
•
Apple, Inc KPI
•
Market Share
•
Shareholder value
STOCK PRICE TO P/E RATIO
3
•
Current Stock Price
•
$195.60
•
Earning per Share
•
$6.13
•
Current Price to Earning Ratio
•
32.21
•
P/E = stock price/earning per share
•
A business that steadily increases its earnings will draw in investors seeking long-term gains
.
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MARKET CAPITALIZATIONS
•
Apples current Market cap: 3.044 trillion
•
Definition: •
Refers to the total market value in US dollars of all outstanding shares of stock of a corporation (Fernando, 2023). Is computed by multiplying the current stock price by the total number of outstanding shares of the company.
•
What is means to investors:
•
Instead of using sales or total assets, the investment community utilizes this number to assess a company's size. When making a purchase, the market capitalization is utilized to ascertain whether a potential takeover target is a fair bargain for the
TRENDS IN STOCK PRICE, DIVIDEND PAYOUT, AND TOTAL STOCKHOLDERS’ EQUITY
5
Year
2021
2022
2023
Stock Price (average)
139.0277
153.5276
171.4005
Dividend payout (every November) $0.86
$0.90
$0.95
Total Stockholders’ equity (billions)
63.09
$50.672
$62.146
The stockholders’ equity has increased by 22.64% from 2022-2023. With the pandemic and inflation there was a decrease in the stockholder equity between 2021-2022. However, Apple has managed to pull through and has increased its trends.
MEETING FINANCIAL GOALS
6
•
Apple meeting financial goals •
A corporation must have strong liquidity, high solvency, profitability, efficiency, and solid coverage to accomplish its financial objectives.
•
Profit margin is at 25.31%
•
Ratios have improved over time as compared to prior years.
•
Recommendation of stock
•
Buy
•
Just looking at the numbers, it's clear that the business is performing well and will reach its financial targets.
•
The stock prices show a low of 124.17 and a high of 199.62 in the past 52 weeks.
•
Currently, the stock is trading at $195.69. EPS ratio is 6.13 and has a dividend yield of 0.49% for 2023
•
The market for this stock is in good standing, profitable and has strong stock appreciation.
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•
The choice of whether to hold, purchase more, or sell will differ depending on how long an investor has held onto this stock.
•
Some analysts see the stock has a risk because there could be a potential slowdown in exponential growth due to Apples current revenue coming mainly from iPhone products (Zucchi, 2023).
•
A reduction in iPhone purchases could result in decreased stock price
•
Having a more differentiated portfolio in different sectors so some may not want to purchase this stock
•
AI technology risk:
•
Apple has not made AI a priority leaving it behind on the curve compared to other big tech companies (Duggan, 2023).
COMPARISON OF OTHER ANALYSTS
7
REFERENCES
•
Apple cash flow from Financial Activities 2010-2023: AAPL
. Macrotrends. (n.d.-a). https://www.macrotrends.net/stocks/charts/AAPL/apple/cash-flow-from-financial-activities
•
Duggan, W. (2023, September 7). Should you buy apple (AAPL) stock? | investing | U.S. news
. Should You Buy Apple (AAPL) Stock? https://money.usnews.com/investing/stock-market-news/articles/pros-and-cons-
to-buying-apple-aapl-stock •
Fernando, J. (2023, December 14). Market capitalization: How is it calculated and what does it tell investors?. Investopedia. https://www.investopedia.com/terms/m/marketcapitalization.asp
•
Twin, A. (2023, November 6). Key performance indicator (KPI): Definition, types, and examples. Investopedia. https://www.investopedia.com/terms/k/kpi.asp •
Yahoo! (2023, December 18). Apple Inc. (AAPL) income statement
. Yahoo! Finance. https://finance.yahoo.com/quote/AAPL/financials?p=AAPL •
Zucchi, K. (2023, February 28). Investing in Apple: The risks and rewards. Investopedia. https://www.investopedia.com/stock-analysis/021815/investing-apple-risks-rewards-aapl.aspx 8
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