Apple Inc. (AAPL)

Discount cash flow analysis

Buy Undervalued by 135.3%

5% margin of safety What's this?

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How does this work?

This is an interactive analyst report for Apple Inc., based on a discounted cash flow valuation approach.

You can modify the assumptions and the valuation will be updated automatically. You can also save and share your valuation.

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Values in $ millions
2009 2010 2011 2012 2013 2014 2015 2016
 
                 
               
 

What will the revenues be in the future?

Growth beyond year three is driven by the terminal growth rate.

Sensitivity matrix

   
-1%
Discount Rate %
0%

1%
  -1% $276.25 $273.04 $269.93
Terminal Growth% 0 $277.25 $274.02 $270.88
  +1% $278.27 $275.00 $271.83

How does a change in discount rate or terminal growth affect valuation?

This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate

Valuations and comments

  • Valuecruncher created a new valuation of $85.59 (overvalued by 26.51%) - 1 day ago
  • kudzi created a new valuation of $438.13 (undervalued by 4.32%) - over 3 years ago
  • RidleySmith created a new valuation of $315.73 (overvalued by 17.96%) - over 3 years ago
  • RidleySmith created a new valuation of $251.02 (overvalued by 34.77%) - over 3 years ago
  • RidleySmith created a new valuation of $367.60 (overvalued by 4.48%) - over 3 years ago
  • GordonGekko created a new valuation of $372.20 (undervalued by 9.85%) - over 3 years ago
  • GordonGekko created a new valuation of $274.02 (undervalued by 12.72%) - over 4 years ago
  • GordonGekko created a new valuation of $267.28 (undervalued by 5.3%) - over 4 years ago
  • LennyTsatskin created a new valuation of $162.44 (overvalued by 38.01%) - over 4 years ago
  • hfdsfgh created a new valuation of $195.60 (overvalued by 11.99%) - over 4 years ago
  • hfdsfgh created a new valuation of $146.70 (overvalued by 34.7%) - over 4 years ago
  • hfdsfgh created a new valuation of $146.70 (overvalued by 34.7%) - over 4 years ago
  • wantes created a new valuation of $225.61 (undervalued by 12.43%) - over 4 years ago
  • tobyzero created a new valuation of $194.49 (overvalued by 2.41%) - over 4 years ago
  • tnaga created a new valuation of $306.10 (undervalued by 50.73%) - over 4 years ago
  • tnaga created a new valuation of $340.27 (undervalued by 67.55%) - over 4 years ago
  • GordonGekko created a new valuation of $189.23 (overvalued by 4.31%) - over 4 years ago
  • antbatalha created a new valuation of $187.47 (overvalued by 9.9%) - over 4 years ago
  • mikedemon created a new valuation of $180.26 (overvalued by 13.79%) - over 4 years ago
  • denmwa2030ce created a new valuation of $202.64 (undervalued by 4.82%) - over 4 years ago
  • denmwa2030ce created a new valuation of $190.17 (overvalued by 1.63%) - over 4 years ago
  • denmwa2030ce created a new valuation of $235.72 (undervalued by 21.93%) - over 4 years ago
  • SethWellbourne created a new valuation of $192.30 (overvalued by 0.05%) - over 5 years ago
  • sh0n created a new valuation of $184.36 (overvalued by 2.9%) - over 5 years ago
  • sh0n created a new valuation of $186.13 (overvalued by 1.96%) - over 5 years ago
  • sh0n created a new valuation of $179.67 (overvalued by 5.37%) - over 5 years ago
  • GordonGekko created a new valuation of $176.16 (overvalued by 7.29%) - over 5 years ago
  • burakakduman created a new valuation of $174.76 (overvalued by 6.05%) - over 5 years ago
  • burakakduman created a new valuation of $44.97 (overvalued by 75.83%) - over 5 years ago
  • burakakduman created a new valuation of $168.06 (overvalued by 9.65%) - over 5 years ago
  • spike created a new valuation of $190.14 (undervalued by 10.44%) - over 5 years ago
  • spike created a new valuation of $341.69 (undervalued by 98.47%) - over 5 years ago
  • spike created a new valuation of $341.69 (undervalued by 98.47%) - over 5 years ago
  • laguerriere created a new valuation of $161.80 (overvalued by 2.27%) - over 5 years ago
  • GordonGekko created a new valuation of $161.62 (undervalued by 1.02%) - over 5 years ago
  • manchini created a new valuation of $155.77 (undervalued by 2.65%) - over 5 years ago
  • manchini created a new valuation of $445.71 (undervalued by 193.71%) - over 5 years ago
  • gvrtalks created a new valuation of $140.87 (undervalued by 0.61%) - over 5 years ago
  • gvrtalks created a new valuation of $140.87 (undervalued by 0.61%) - over 5 years ago
  • divechip created a new valuation of $150.84 (undervalued by 8.14%) - over 5 years ago
  • divechip created a new valuation of $140.67 (undervalued by 0.85%) - over 5 years ago
  • seamuskrat created a new valuation of $140.59 (undervalued by 3.31%) - over 5 years ago
  • jschern created a new valuation of $164.59 (undervalued by 20.16%) - over 5 years ago
  • jschern created a new valuation of $116.05 (overvalued by 15.27%) - over 5 years ago
  • jschern created a new valuation of $157.75 (undervalued by 15.17%) - over 5 years ago
  • GordonGekko created a new valuation of $140.57 (undervalued by 2.63%) - over 5 years ago
  • kdevcich created a new valuation of $164.66 (undervalued by 15.37%) - over 5 years ago
  • kdevcich created a new valuation of $140.59 (overvalued by 1.49%) - over 5 years ago
  • kdevcich created a new valuation of $139.48 (overvalued by 2.27%) - over 5 years ago
  • GordonGekko created a new valuation of $139.16 (overvalued by 1.27%) - over 5 years ago
  • dimpi created a new valuation of $93.67 (overvalued by 28.38%) - over 5 years ago
  • ckc2 created a new valuation of $126.68 (overvalued by 0.44%) - over 5 years ago
  • ckc2 created a new valuation of $145.62 (undervalued by 17.53%) - over 5 years ago
  • SethWellbourne created a new valuation of $101.20 (overvalued by 16.89%) - over 5 years ago
  • Brownmp created a new valuation of $141.59 (undervalued by 14.72%) - over 5 years ago
  • GordonGekko created a new valuation of $125.75 (undervalued by 9.35%) - over 5 years ago
  • SethWellbourne created a new valuation of $121.48 (undervalued by 2.56%) - over 5 years ago
  • SethWellbourne created a new valuation of $115.44 (undervalued by 10.48%) - over 5 years ago
  • mlongval created a new valuation of $100.82 (overvalued by 0.76%) - over 5 years ago
  • rs12345 created a new valuation of $91.18 (undervalued by 2.63%) - over 5 years ago
  • rs12345 created a new valuation of $78.43 (overvalued by 11.72%) - over 5 years ago
  • GordonGekko created a new valuation of $96.00 (undervalued by 0.1%) - over 5 years ago
  • GordonGekko created a new valuation of $118.87 (undervalued by 10.48%) - over 6 years ago
  • GordonGekko created a new valuation of $125.99 (undervalued by 29.79%) - over 6 years ago
  • TheCrunchBlog created a new valuation of $163.98 (undervalued by 16.37%) - over 6 years ago
  • andrew created a new valuation of $91.09 (overvalued by 49.72%) - over 6 years ago
  • LordTrask created a new valuation of $150.67 (overvalued by 16.84%) - over 6 years ago
  • benkepes created a new valuation of $74.80 (overvalued by 59.84%) - over 6 years ago
  • Abo created a new valuation of $100.47 (overvalued by 46.6%) - over 6 years ago
  • jeremy created a new valuation of $199.59 (undervalued by 6.07%) - over 6 years ago
  • GordonGekko created a new valuation of $144.74 (overvalued by 19.59%) - over 6 years ago
  • lancewiggs created a new valuation of $219.71 (undervalued by 29.45%) - over 6 years ago
  • jeremy created a new valuation of $200.12 (undervalued by 7.53%) - over 6 years ago
  • Philip created a new valuation of $116.63 (overvalued by 37.33%) - over 6 years ago
  • KiwiEMH created a new valuation of $166.28 (overvalued by 10.65%) - over 6 years ago
  • TheCrunchBlog created a new valuation of $146.70 (overvalued by 21.17%) - over 6 years ago
  • TheCrunchBlog created a new valuation of $197.63 (undervalued by 6.2%) - over 6 years ago
  • stuartm created a new valuation of $228.96 (undervalued by 23.52%) - over 6 years ago
  • acoy created a new valuation of $96.26 (overvalued by 47.0%) - over 6 years ago
  • andrew created a new valuation of $99.27 (overvalued by 40.71%) - over 6 years ago
  • Gaurav created a new valuation of $175.53 (overvalued by 5.68%) - over 6 years ago
  • TheCrunchBlog created a new valuation of $149.75 (overvalued by 9.95%) - over 6 years ago
  • jeremy created a new valuation of $156.43 (overvalued by 6.98%) - over 6 years ago

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The boring details

All amounts in millions Figures
Enterprise Value: 82,938
Net Debt (Long-term borrowings less cash): -23,464
Equity Value: 222,087
Number of Shares Outstanding: 913,000,000
Calculated value per share: $274.02

Enterprise Value is the present value of the post-tax cash flows for a business into the future.


Calcuation of EV

Where:

  • C1, C2, C3 - the cash flow in period 1, 2, 3, ...
  • r - the discount rate

To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.


Perpetuity

Where:

  • Cn - the cash flow in the final forecast period.
  • LTG - the long-term growth rate
  • r - the discount rate
  • g - the terminal growth rate

The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.


CAPM model

Where:

  • rt - the risk free rate
  • t - the tax rate
  • B - the beta of the company
  • MRP - the Market Risk Premium

Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.