AAPL Overvalued by 62%, Says GuruFocus DCF Analysis
Apple Inc. (AAPL) has been on a tear, but its recent price performance may be unsustainable according to a Discounted Cash Flow (DCF) analysis conducted by GuruFocus. Over the past year, AAPL's stock has appreciated by 38%, yet it has seen a decline of 5.9% in the last month.
The DCF earnings-based model estimates AAPL's intrinsic value at $197.48, significantly lower than its current price of $319.70. This indicates that AAPL is overvalued by 61.9%. The free cash flow (FCF)-based intrinsic value for AAPL is calculated at $176.01, supporting the earnings-based valuation.
GuruFocus employs a two-stage approach to estimate the intrinsic value of AAPL. The first stage accounts for a high growth rate over the next ten years, while the second stage reflects a more conservative terminal growth rate. The model assumes a 10-year growth rate of 15.2%, a 10-year Treasury rate of 4.72%, and a discount rate of 11%.
The GF Score™ evaluates AAPL's financial strength, profitability, growth potential, valuation, and momentum. With a score of 96/100, AAPL suggests a robust financial position and strong growth prospects. However, the predictability rank is only 2/5 stars, indicating that the DCF model's reliability is limited.