Apple still trades like a steel mill going out of business

With its stock at an all-time high, you might think Apple was over-valued.

My headline is borrowed, once again, from venture capitalist Marc Andreessen, who tweeted the phrase nearly two years ago, accompanied by a chart labeled “Reality Distorted.”

I’ve adapted and updated his chart to reflect today’s PE ratios and added a second factor: Operating cash flow.

[E-mail readers getting an error message, click here for the interactive chart.]


[To get the full effect, click the column headings.]

Reality is no less distorted than it was two years ago. Apple is still hauling in more billions, and (relative to its peers) getting the least respect.

Below: Trailing price-to-earnings ratios over that time.

steel mill PE ratios

Click to enlarge. 

My take: Wall Street still sees Apple as a hit-based company that will never have another hit. History suggests it’s more like Pixar, which only releases hits.

4 Comments

  1. Ken Cheng said:

    Interesting, I thought the quote came from Horace Dediu.

    2
    January 16, 2018
  2. I would like to thank the “smart money” on Wall Street, analysts from FUDD central, lying brokerage firms and the complicit media in allowing me to assemble a very large Apple holding at dirt cheap prices and yes 177-179 is still dirt cheap. Although my average cost is 100 points less, I still buy more Apple at every opportunity.

    Apple can be bought at will and held. By the end of FY 2018 second quarter, we will cross under 5 billion shares outstanding. One day there will be billions fewer shares and those that put their money up and held position, will laugh last.

    1
    January 16, 2018

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