Apple Stock Significantly Overvalued According to DCF Analysis
On October 5, 2026, GuruFocus conducted a discounted cash flow (DCF) analysis for Apple Inc. (AAPL) to determine its intrinsic value compared to its current market price. The analysis revealed that Apple's stock, which had risen 23.1% year-to-date but had declined 2.2% over the past week, is significantly overvalued. The earnings-based intrinsic value was calculated at $177.31, while the free cash flow (FCF)-based intrinsic value stood at $162.67. Both figures suggest a substantial overvaluation, with margins of safety of -88.2% and -105.1%, respectively.
The DCF earnings-based model projected Apple's earnings growth at 14.9% over the next ten years, discounted at a rate of 12%. This was followed by a terminal growth rate of 4% for the subsequent ten years. Key assumptions included a current EPS of $8.72, a 10-year Treasury rate of 5.29%, and a discount rate of 12%. The GF Value™, derived from historical trading multiples and future performance estimates, valued Apple's stock at $287.77, indicating a 16.0% overvaluation.
Apple's GF Score™ of 95/100 suggests strong fundamentals, with high ratings in financial strength, profitability, growth, and momentum. However, the predictability rank of 2/5 stars indicates that the DCF model may be less reliable for this stock. Additionally, the guru ownership signal shows that 36 gurus currently hold the stock, with mixed activity in recent quarters, and insiders have sold $118.1M worth of shares over the past year.
In summary, all three valuation models, DCF earnings, DCF FCF, and GF Value™, concur that Apple Inc. is significantly overvalued at its current price. This consensus suggests caution for potential investors, particularly given the stock's low predictability rank and recent insider selling activity.