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Demand above management’s forecast could convert into more revenue as advanced-node supply improves.
FY2027 consolidated revenue growth falls below 8%.
Sell. At $316.22 on 2026-09-08, the shares stood above $214 Fair value and $255.21 Potential value.3
The main risk is failed demand conversion. FY2027 revenue growth below 8% would weaken sales, profit, cash generation, and estimated value.
The clearest upside is supply normalization. Demand exceeded management’s forecast, so better advanced-node availability could convert deferred shipments into revenue.4
FY2025 free cash flow was $98.77 billion, and diluted shares declined between FY2023 and FY2025. These facts support per-share potential but do not prove future repurchases.56
Customer enthusiasm and demand above management’s forecast indicate recent preference for Apple products. They do not establish indefinite switching costs or protection from disruption.4
The cycle improves if advanced-node availability rises while reported demand remains strong. More available products could convert deferred demand into shipments and revenue without assuming a favorable mix effect.4
Sell because the report-date price exceeds both Fair value and Potential value.
Sell because the report-date price exceeds both Fair value and Potential value.
The Company designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September.
Home includes Apple TV 4K®, the Company’s media streaming and gaming device based on its tvOS® operating system, and HomePod® and HomePod mini®, high-fidelity wireless smart speakers. As of September 27, 2025, the Company had other purchase obligations of $14.8 billion, with $7.0 billion payable within 12 months.
Extending September-quarter shortages into FY2027 is a stress assumption, not an observed condition. Management only described expected September-quarter constraints. FY2027 revenue growth below the 10.18% base anchor, and especially below 8%, would show weak demand conversion. A higher required return or lower mature multiple would then compound the loss in value.
Management reported customer enthusiasm and demand above its forecast in the June 2026 quarter. That supports recent brand preference, but it does not establish durable retention, pricing power, switching costs or repeat purchases.
Durability would strengthen if demand remains strong after availability improves. It would weaken if supply normalizes but FY2027 sales conversion disappoints, because the dated evidence does not establish demand beyond the visible forecast period.
FY2025 operating income was $133.05 billion and free cash flow was $98.77 billion. These are financial outcomes showing strong monetization in that period, not evidence of durable retention or pricing power.5
The highlighted cell is Fair value when every assumption sits at its base level ($214.00). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $107.9B after modeled capex of $12.7B, with terminal value at 59.4% of . A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
A beat would show stronger sales and per-share profit than the dated forecasts, but it would not establish growth beyond FY2027.
Results within both FY2027 ranges would support the near-term sales and per-share profit path without establishing longer-term growth.
Industry benchmarks as of 2026-09-01 show capex at 0.44x depreciation and capex-to-revenue of -3.8%. The negative sign records cash spending as an outflow, not negative economic investment.
The cycle improves if advanced-node availability rises while reported demand remains strong. More available products could convert deferred demand into shipments and revenue without assuming a favorable mix effect.
The cycle weakens if shortages persist across iPhone, Mac, and iPad. Limited availability would defer sales and reduce operating profit and cash relative to the forecast path.
The report-date price exceeds both Fair value and Potential value, supporting no position under the Sell rating.3
Keep exposure at zero unless a later valuation supports a non-Sell rating and the FY2027 revenue-growth trigger remains intact.
The report-date price is above both Fair value and Potential value.3
Sell or reduce to no position because the valuation gap outweighs near-term demand strength.4
The long-run path remains sensitive to growth after FY2027 and what investors pay for mature earnings.1
Sell because $316.22 stands above $214 Fair value and $255.21 Potential value.3
Strong demand and cash generation remain visible, but they do not offset the valuation gap or establish the post-FY2027 growth duration.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
This path lowers sales, profit, and cash while also reducing what investors pay for future earnings. Recovery requires better availability and renewed reported growth.
FY2027 revenue growth below 8% would show that improved availability did not convert demand into enough sales, weakening earnings and cash expectations.
Cost of equity above 10.9282% would reduce the present value of future earnings even if nominal sales and profit remain positive.
A terminal P/E below 18.6x would mean investors pay less for each dollar of mature earnings, reducing long-duration equity value.
The five developments that would weaken our investment case.
Continued product constraints can prevent some demand from reaching reported shipments and revenue, weakening the near-term demand-conversion thesis that supports the growth case.
Current:Base anchor: 10.18% YoY
Alert ifBelow 8% in FY2027
A higher required return reduces the present value of future earnings even if nominal sales and profit continue to grow.
Current:8.9282% on 2026-09-09
Alert ifAbove 10.9282% within 12 months
If investors pay less for each dollar of mature earnings, the value assigned today to future earnings falls. That would weaken the case that near-term growth deserves a lasting premium.
Current:House assumption: 23.25x
Alert ifBelow 18.6x within five years
Without a falling share base, earnings per share lose an important assumption-based support. Future repurchases must be tested against available free cash flow and stock compensation before assuming continued share reduction.
Current:14.59418 billion on 2026-09-09
Alert ifStops declining, or buybacks exceed 120% of FCF for two fiscal years
Weakness in Americas would reduce consolidated sales. Europe and Other are material revenue pools, but their dated revenue levels do not establish that they would offset an Americas shortfall.
Current:42.86% of FY2025 revenue
Alert ifDeclines YoY for two consecutive fiscal years
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Limitation: Terminal value is 61.3% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Limitation: Terminal value is 60.7% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
The Base path assumes near-term demand converts, followed by slower mature growth. Sustained stronger growth or a material undershoot would disconfirm that path.
This scenario requires improved availability to convert demand into revenue and continued share reduction to support earnings per share. It fails if FY2027 revenue growth falls below 8%, or if diluted shares stop falling.46
Supply constraints could contribute, but a miss would only establish that FY2027 revenue or diluted EPS fell below its cited analyst forecast range.
FY2025 operating cash was close to reported profit, but stock compensation remains a real cost to shareholders.6
Improvement should release constrained shipments.4
Memory costs can reduce profit from each sales dollar.4
A lower share count raises earnings per share for unchanged profit.6
| $365.82B |
| $394.33B |
| $383.29B |
| $391.04B |
| $416.16B |
| +3.3% |
| Gross profit | $152.84B | $170.78B | $169.15B | $180.68B | $195.20B | +6.3% |
| Operating income | $108.95B | $119.44B | $114.30B | $123.22B | $133.05B | +5.1% |
| Net income | $94.68B | $99.80B | $97.00B | $93.74B | $112.01B | +4.3% |
| EPS (diluted) | $5.61 | $6.11 | $6.13 | $6.08 | $7.46 | +7.4% |
| EBITDA | $123.14B | $130.54B | $125.82B | $134.66B | $144.43B | +4.1% |
| R&D | $21.91B | $26.25B | $29.92B | $31.37B | $34.55B | +12.1% |
| SG&A | $21.97B | $25.09B | $24.93B | $26.10B | $27.60B | +5.9% |
FY2025 operating cash flow was $111.48 billion, capex was $12.72 billion, and free cash flow was $98.77 billion. This provides substantial financial capacity without proving how future cash will be allocated.56
Diluted average shares fell from 15.812547 billion in FY2023 to 15.004697 billion in FY2025. Future share reduction remains an assumption and must be tested against free cash flow and $12.86 billion of FY2025 stock compensation.
FY2025 operating income and cash generation were substantial, but those outcomes do not establish a comparable multi-year return-on-invested-capital trend.
WACC was 8.8463% on 2026-09-09; no ROIC comparison is presented here.
FY2027 forecasts span $497.89-$594.86 billion of revenue and $8.69-$10.67 of diluted EPS.
The FY2027 revenue and diluted-EPS ranges leave room for outcomes on either side of their central forecasts.
One weighted earnings valuation derives 61.9% of value from the terminal period.
The valuation is therefore sensitive to post-FY2027 growth and mature valuation assumptions.
The supplied peer data show wide differences in revenue growth, operating margins and forward P/E across the comparison companies.
Because those economics differ, peer multiples can identify valuation outliers but should not set Apple’s Fair value.
| Revenue | $416,161,000,000 |
|---|---|
| Cost of revenue | $220,960,000,000 |
| Gross profit | $195,201,000,000 |
| Operating expenses | $62,151,000,000 |
| Operating income | $133,050,000,000 |
| Non-operating items and tax | -$21,040,000,000 |
| Net income | $112,010,000,000 |
| Total assets | $359,241,000,000 |
|---|---|
| Cash | $35,934,000,000 |
| Current assets | $147,957,000,000 |
| Total liabilities | $285,508,000,000 |
| Current liabilities | $165,631,000,000 |
| Shareholders’ equity | $73,733,000,000 |
| Net income | $112,010,000,000 |
|---|---|
| Operating inflow | $136,571,000,000 |
| Depreciation and amortization | $11,698,000,000 |
| Stock-based compensation | $12,863,000,000 |
| Operating cash flow | $111,482,000,000 |
| Operating outflow | $25,089,000,000 |
| Cash available | $156,620,000,000 |
| Beginning cash | $29,943,000,000 |
| Investing inflow | $15,195,000,000 |
| Financing outflow | $120,686,000,000 |
| Share repurchases | $90,711,000,000 |
| Dividends paid | $15,421,000,000 |
| Net debt repayment | $8,483,000,000 |
| Other financing activities | $6,071,000,000 |
| Ending cash | $35,934,000,000 |
| Investing cash flow | $15,195,000,000 |
| Financing cash flow | -$120,686,000,000 |
Source: SEC EDGAR · Filed 2025-10-31 · SEC EDGAR
| Revenue by operating segment | Revenue | Share | YoY |
|---|---|---|---|
| Americas | $178.4B | 42.9% | 6.8% |
| Europe | $111B | 26.7% | 9.6% |
| Greater China | $64.4B | 15.5% | -3.8% |
| Rest Of Asia Pacific | $33.7B | 8.1% | 9.9% |
| Japan | $28.7B | 6.9% | 14.6% |
Source: SEC EDGAR · Filed 2025-10-31 · SEC EDGAR
| Revenue by geography | Revenue | Share | YoY |
|---|---|---|---|
| Other | $200B | 48.1% | 10% |
| United States | $151.8B | 36.5% | 6.7% |
| China | $64.4B | 15.5% | -3.8% |
Point-in-time financial data used in the 2026-09-09 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-09-24 | $215.6B | $73.3B | $45.7B | $66.2B | $53.5B | $12.7B | $10.5B | $4.2B | $29.7B | $12B | — | -$46B | -$20.9B | — | $20.5B | $67.2B | $87B | 27.8% | — | 5.5% | — |
| 2017-09-30 | $229.2B | $76.6B | $48.4B | $64.2B | $51.8B | $12.5B | $10.2B | $4.8B | $32.9B | $12.6B | — | -$46.4B | -$18B | $20.5B | $20.3B | $74.2B | $115.7B | 26.8% | — | 6.3% | — |
| 2018-09-29 | $265.6B | $87B | $59.5B | $77.4B | $64.1B | $13.3B | $10.9B | $5.3B | $72.7B | $13.7B | — | $16.1B | -$87.9B | $20.3B | $25.9B | $66.3B | $114.5B | 26.7% | — | 7.3% | — |
| 2019-09-28 | $260.2B | $81.9B | $55.3B | $69.4B | $58.9B | $10.5B | $12.5B | $6.1B | $66.9B | $14.1B | — | $45.9B | -$91B | $25.9B | $50.2B | $100.6B | $108B | 24.6% | — | 6.8% | — |
| 2020-09-26 | $274.5B | $81B | $57.4B | $80.7B | $73.4B | $7.3B | $11.1B | $6.8B | $72.4B | $14.1B | — | -$4.3B | -$86.8B | $50.2B | $39.8B | $90.9B | $112.4B | 24.1% | — | 5.1% | — |
| 2021-09-25 | $365.8B | $123.1B | $94.7B | $104B | $93B | $11.1B | $11.3B | $7.9B | $86B | $14.5B | — | -$14.5B | -$93.4B | $39.8B | $35.9B | $62.6B | $124.7B | 29.8% | — | 5.7% | — |
| 2022-09-24 | $394.3B | $130.5B | $99.8B | $122.2B | $111.4B | $10.7B | $11.1B | $9B | $89.4B | $14.8B | -$123M | -$22.4B | -$110.7B | $35.9B | $25B | $48.3B | $110.1B | 30.3% | — | 8.0% | — |
| 2023-09-30 | $383.3B | $125.8B | $97B | $110.5B | $99.6B | $11B | $11.5B | $10.8B | $77.6B | $15B | -$9.9B | $3.7B | -$108.5B | $25B | $30.7B | $61.6B | $105.1B | 29.8% | — | 9.2% | — |
| 2024-09-28 | $391B | $134.7B | $93.7B | $118.3B | $108.8B | $9.4B | $11.4B | $11.7B | $94.9B | $15.2B | -$6B | $2.9B | -$122B | $30.7B | $29.9B | $65.2B | $96.7B | 31.5% | — | 7.9% | — |
| 2025-09-27 | $416.2B | $144.4B | $112B | $111.5B | $98.8B | $12.7B | $11.7B | $12.9B | $90.7B | $15.4B | -$8.5B | $15.2B | -$120.7B | $29.9B | $35.9B | $54.7B | $90.7B | 32.0% | — | 8.8% | — |
Apple Inc. (AAPL) trades at 33.6x forward earnings against a peer median of 20.0x. Its EV/EBITDA of 27.9x compares with a peer median of 26.9x. The comparison uses 4 peers: Microsoft Corporation, Broadcom Inc., Micron Technology Inc. and Advanced Micro Devices Inc., as of 2026-09-08 to 2026-09-09.
| Impact |
|---|
| Note |
|---|
| Demand for advanced-node products | positive | Demand above management’s forecast creates conditional upside if supply becomes available. |
| Rising memory costs | negative | Management identified memory costs as the main immediate margin pressure, with only partial offsets. |
Apple enters this demand-led cycle with strong product interest but limited supply flexibility. That combination supports sales potential while increasing execution risk.4
| While shares exceed $255.21 Potential value | Avoid initiating a position while the $316.22 report-date price exceeds $214.00 Fair value and $255.21 Potential value; this is consistent with Sell. | Even the constructive valuation endpoint remains below that threshold. |
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Value each distinct segment, subtract corporate overhead and net debt, add probability-weighted optionality, and divide by diluted shares.
Discount the explicit dividend path and its Gordon-growth terminal value at cost of equity.
| $148.09B |
| $163.17B |
| $176.22B |
| $188.55B |
| $199.87B |
| $209.86B |
| $219.31B |
| $228.08B |
| $236.06B |
| $243.14B |
| NOPAT | $121.18B | $133.52B | $144.20B | $154.29B | $163.55B | $171.73B | $179.46B | $186.64B | $193.17B | $198.96B |
| Residual cash after reinvestment policy | $121.18B | $133.52B | $144.20B | $154.29B | $163.55B | $171.73B | $179.46B | $186.64B | $193.17B | $198.96B |
| Revenue growth | 14.8% | 10.2% | 8.0% | 7.0% | 6.0% | 5.0% | 4.5% | 4.0% | 3.5% | 3.0% |
| Operating margin | 31.0% | 31.0% | 31.0% | 31.0% | 31.0% | 31.0% | 31.0% | 31.0% | 31.0% | 31.0% |
| Tax rate | 18.2% | 18.2% | 18.2% | 18.2% | 18.2% | 18.2% | 18.2% | 18.2% | 18.2% | 18.2% |
| Reinvestment rate | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Terminal growth | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
| Broadcom Inc. |
| 19.0x |
| 19.7x |
| 34.4x |
| 44.2% |
| 54.3% |
| MU | Micron Technology Inc. | 6.6x | 12.7x | 16.5x | 66.6% | 80.4% |
| AMD | Advanced Micro Devices Inc. | 32.6x | 20.0x | 80.6x | 10.2% | 17.2% |
