Andy Zaky on Apple’s share price, and how most mainstream financial analysts don’t seem to grasp the implications of Apple’s use of subscription-based accounting for the iPhone:
Right away, one ought to notice the staggering growth rate in both
revenue and earnings that Apple displayed in 2008. Apple’s real
revenue grew 54.5% from $24.637 billion in FYE 2007 to $38.041
billion in FYE 2008 — a full $13.4 billion growth in revenues. Even
more impressive is Apple’s 81.2% growth rate in adjusted net income.
For a company that is trading at 12 times 2008 earnings, it doesn’t
take a genius to conclude that Apple is severely undervalued.
Especially since Apple currently trades at about 3.37 times its cash
position — which is objectively and significantly lower than every
other large cap tech company.
GOOG trades at 7.18 times its cash position, RIMM at 15.51 times
cash, AMZN at 9.15 times cash, MSFT at 9.13 times cash, CSCO at 3.62
times cash, IBM at 10.96 times cash, INTC at 6.54 times cash, and
HPQ at 5.15 times cash. What is more, only GOOG, AAPL and MSFT have
no debt of the companies mentioned above. Apple has the largest net
cash position than any of those companies and Apple has more net
cash than RIMM, GOOG, AMZN and IBM combined.