Apple Inc. (AAPL)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $151.08 | $148.44 | $145.92 | |
| Terminal Growth% | 0 | $152.45 | $149.75 | $147.18 |
| +1% | $153.85 | $151.10 | $148.47 |
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 $103.63 (overvalued by 8.74%) - 11 months ago
- kudzi created a new valuation of $438.13 (undervalued by 4.32%) - almost 6 years ago
- RidleySmith created a new valuation of $315.73 (overvalued by 17.96%) - almost 6 years ago
- RidleySmith created a new valuation of $251.02 (overvalued by 34.77%) - almost 6 years ago
- RidleySmith created a new valuation of $367.60 (overvalued by 4.48%) - almost 6 years ago
- GordonGekko created a new valuation of $372.20 (undervalued by 9.85%) - over 6 years ago
- GordonGekko created a new valuation of $274.02 (undervalued by 12.72%) - almost 7 years ago
- GordonGekko created a new valuation of $267.28 (undervalued by 5.3%) - over 7 years ago
- LennyTsatskin created a new valuation of $162.44 (overvalued by 38.01%) - over 7 years ago
- hfdsfgh created a new valuation of $195.60 (overvalued by 11.99%) - over 7 years ago
- hfdsfgh created a new valuation of $146.70 (overvalued by 34.7%) - over 7 years ago
- hfdsfgh created a new valuation of $146.70 (overvalued by 34.7%) - over 7 years ago
- wantes created a new valuation of $225.61 (undervalued by 12.43%) - over 7 years ago
- tobyzero created a new valuation of $194.49 (overvalued by 2.41%) - over 7 years ago
- tnaga created a new valuation of $306.10 (undervalued by 50.73%) - over 7 years ago
- tnaga created a new valuation of $340.27 (undervalued by 67.55%) - over 7 years ago
- GordonGekko created a new valuation of $189.23 (overvalued by 4.31%) - over 7 years ago
- antbatalha created a new valuation of $187.47 (overvalued by 9.9%) - over 7 years ago
- mikedemon created a new valuation of $180.26 (overvalued by 13.79%) - over 7 years ago
- denmwa2030ce created a new valuation of $202.64 (undervalued by 4.82%) - over 7 years ago
- denmwa2030ce created a new valuation of $190.17 (overvalued by 1.63%) - over 7 years ago
- denmwa2030ce created a new valuation of $235.72 (undervalued by 21.93%) - over 7 years ago
- SethWellbourne created a new valuation of $192.30 (overvalued by 0.05%) - almost 8 years ago
- sh0n created a new valuation of $184.36 (overvalued by 2.9%) - almost 8 years ago
- sh0n created a new valuation of $186.13 (overvalued by 1.96%) - almost 8 years ago
- sh0n created a new valuation of $179.67 (overvalued by 5.37%) - almost 8 years ago
- GordonGekko created a new valuation of $176.16 (overvalued by 7.29%) - almost 8 years ago
- burakakduman created a new valuation of $174.76 (overvalued by 6.05%) - almost 8 years ago
- burakakduman created a new valuation of $44.97 (overvalued by 75.83%) - almost 8 years ago
- burakakduman created a new valuation of $168.06 (overvalued by 9.65%) - almost 8 years ago
- spike created a new valuation of $190.14 (undervalued by 10.44%) - almost 8 years ago
- spike created a new valuation of $341.69 (undervalued by 98.47%) - almost 8 years ago
- spike created a new valuation of $341.69 (undervalued by 98.47%) - almost 8 years ago
- laguerriere created a new valuation of $161.80 (overvalued by 2.27%) - 8 years ago
- GordonGekko created a new valuation of $161.62 (undervalued by 1.02%) - 8 years ago
- manchini created a new valuation of $155.77 (undervalued by 2.65%) - 8 years ago
- manchini created a new valuation of $445.71 (undervalued by 193.71%) - 8 years ago
- gvrtalks created a new valuation of $140.87 (undervalued by 0.61%) - 8 years ago
- gvrtalks created a new valuation of $140.87 (undervalued by 0.61%) - 8 years ago
- divechip created a new valuation of $150.84 (undervalued by 8.14%) - 8 years ago
- divechip created a new valuation of $140.67 (undervalued by 0.85%) - 8 years ago
- seamuskrat created a new valuation of $140.59 (undervalued by 3.31%) - 8 years ago
- jschern created a new valuation of $164.59 (undervalued by 20.16%) - 8 years ago
- jschern created a new valuation of $116.05 (overvalued by 15.27%) - 8 years ago
- jschern created a new valuation of $157.75 (undervalued by 15.17%) - 8 years ago
- GordonGekko created a new valuation of $140.57 (undervalued by 2.63%) - 8 years ago
- kdevcich created a new valuation of $164.66 (undervalued by 15.37%) - 8 years ago
- kdevcich created a new valuation of $140.59 (overvalued by 1.49%) - 8 years ago
- kdevcich created a new valuation of $139.48 (overvalued by 2.27%) - 8 years ago
- GordonGekko created a new valuation of $139.16 (overvalued by 1.27%) - 8 years ago
- dimpi created a new valuation of $93.67 (overvalued by 28.38%) - 8 years ago
- ckc2 created a new valuation of $126.68 (overvalued by 0.44%) - over 8 years ago
- ckc2 created a new valuation of $145.62 (undervalued by 17.53%) - over 8 years ago
- SethWellbourne created a new valuation of $101.20 (overvalued by 16.89%) - over 8 years ago
- Brownmp created a new valuation of $141.59 (undervalued by 14.72%) - over 8 years ago
- GordonGekko created a new valuation of $125.75 (undervalued by 9.35%) - over 8 years ago
- SethWellbourne created a new valuation of $121.48 (undervalued by 2.56%) - over 8 years ago
- SethWellbourne created a new valuation of $115.44 (undervalued by 10.48%) - over 8 years ago
- mlongval created a new valuation of $100.82 (overvalued by 0.76%) - over 8 years ago
- rs12345 created a new valuation of $91.18 (undervalued by 2.63%) - over 8 years ago
- rs12345 created a new valuation of $78.43 (overvalued by 11.72%) - over 8 years ago
- GordonGekko created a new valuation of $96.00 (undervalued by 0.1%) - over 8 years ago
- GordonGekko created a new valuation of $118.87 (undervalued by 10.48%) - almost 9 years ago
- GordonGekko created a new valuation of $125.99 (undervalued by 29.79%) - almost 9 years ago
- TheCrunchBlog created a new valuation of $163.98 (undervalued by 16.37%) - almost 9 years ago
- andrew created a new valuation of $91.09 (overvalued by 49.72%) - over 9 years ago
- LordTrask created a new valuation of $150.67 (overvalued by 16.84%) - over 9 years ago
- benkepes created a new valuation of $74.80 (overvalued by 59.84%) - over 9 years ago
- Abo created a new valuation of $100.47 (overvalued by 46.6%) - over 9 years ago
- jeremy created a new valuation of $199.59 (undervalued by 6.07%) - over 9 years ago
- GordonGekko created a new valuation of $144.74 (overvalued by 19.59%) - over 9 years ago
- lancewiggs created a new valuation of $219.71 (undervalued by 29.45%) - over 9 years ago
- jeremy created a new valuation of $200.12 (undervalued by 7.53%) - over 9 years ago
- Philip created a new valuation of $116.63 (overvalued by 37.33%) - over 9 years ago
- KiwiEMH created a new valuation of $166.28 (overvalued by 10.65%) - over 9 years ago
- TheCrunchBlog created a new valuation of $146.70 (overvalued by 21.17%) - over 9 years ago
- TheCrunchBlog created a new valuation of $197.63 (undervalued by 6.2%) - over 9 years ago
- stuartm created a new valuation of $228.96 (undervalued by 23.52%) - over 9 years ago
- acoy created a new valuation of $96.26 (overvalued by 47.0%) - over 9 years ago
- andrew created a new valuation of $99.27 (overvalued by 40.71%) - over 9 years ago
- Gaurav created a new valuation of $175.53 (overvalued by 5.68%) - over 9 years ago
- TheCrunchBlog created a new valuation of $149.75 (overvalued by 9.95%) - over 9 years ago
- jeremy created a new valuation of $156.43 (overvalued by 6.98%) - over 9 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 84,722 |
| Net Debt (Long-term borrowings less cash): | -15,386 |
| Equity Value: | 147,618 |
| Number of Shares Outstanding: | 881,000,000 |
| Calculated value per share: | $149.75 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
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.
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.
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.
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/07/below-us150-a-share-apple-aapl-looks-a-buy/
Apple (AAPL) Valuation Assumptions
Our assumptions are revenues of US$32.8 billion in 2008 growing to US$50.0 billion in 2010. We have used a flat EBITDA margin of 21% from 2008. We used a terminal growth rate of 5.75%. We used a terminal capital expenditure number of US$1.0 billion. We have used a WACC (discount rate) of 11.0%.
Our analysis incorporates the cash on the Apple balance sheet – Valuecruncher calculates a net debt number.
Apple is a great company with incredibly innovative products that consumers all around the world want desperately. That is a position that must be envied by all their competitors in the technology space and beyond.
Warren Buffett’s famous quote is “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. At around US$150 a share – in our view Apple fits that criteria.