The Dediu-Munster tapes: No. 4 How Apple gets a higher PE multiple

Once 25% of investors see Apple as a consumer staples company, says Gene Munster, the rest will rush to fall into line.

This is the fourth of eight video clips extracted from a conference recorded live on Oct. 4, 2019 using a beta version of Teooh, an avatar-based virtual event platform backed by Munster’s Loup Ventures.

My take: Coca Cola, Proctor and Gable and Apple? One of these brands is not like the others.

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17 Comments

  1. Gregg Thurman said:

    MSFT is viewed as a Service company and enjoys the multiple that rewards predictability.

    Apple, in the eyes of WS, is transitioning to that of a Services Company, and enjoys a multiple that recognizes the potential, but not the achievement of the transition’s multiple will expand (hopefully) in recognition.

    When Apple gets there it’s model will be same same as MSFT’s, just with a different Service.

    I give Street recognition of Apple’s transition (that leads to substantially higher multiples) 2 years. Until then AAPL will grow based on expansion of Net Income and share count reduction.

    Because Apple’s transition to a Services model won’t suddenly cease or flatten, I’m looking for prolonged multiple expansion over the next 5 years. Thereafter we’re back to growth in Net Income and share count reduction as positive drivers of AAPL.

    2
    October 8, 2019
    • Jerry W Doyle said:

      @Gregg Thurman: “… MSFT is viewed as a Service company and enjoys the multiple that rewards predictability…. Apple, in the eyes of WS, is transitioning to that of a Services Company, and enjoys a multiple that recognizes the potential, but not the achievement of the transition’s multiple will expand (hopefully) in recognition.”

      I agree fully with your description above!

      1
      October 8, 2019
  2. Gregg Thurman said:

    There has to be some other reason for Teeoh than what these conferences are depicting, the animation is cute (but to what end) and the sound quality sucks.

    1
    October 8, 2019
    • Jerry W Doyle said:

      @Gregg Thurman: Thank you! It gives me some comfort to know that I am not becoming senile or aged. I feel odd watching whatever that is suppose to be. One person is talking but another is the one moving his lips. Someone is asking a question and it looks as if the moderator is the one talking. Horace is answering but Gene’s lips are moving. Or Gene is answering and it is Horace’s lips moving. It’s all crazy, unless I had to much Jack or Maker’s Mark.

      0
      October 8, 2019
      • Aaron Belich said:

        As a late 30’s guy who still puts in some game time now and then, I too don’t understand what this app is trying to achieve. Beta quality?! Uh, no. Barely looks to be an Alpha release. The intensity of the animation of the fireplace behind them is incredibly distracting from the already disconnected dialogue from the Avatars, who bear zero resemblance to our host and speakers to begin with.

        I’m not sure if this is Loup thinking they can compete with the likes of EPIC releasing a Fortnite concert (https://youtu.be/NBsCzN-jfvA – don’t be embarrassed if you are completely lost in the appeal, damn kids and their stupid video game concerts /shakesfistatthesky )

        Just throw folks up on Skype, Zoom or WebEx, it’s better than this goofiness.

        0
        October 9, 2019
  3. Kirk DeBernardi said:

    Funny how we repeatedly miss the mark by trying to pigeonhole a company that defies pigeon-holing — “Apple is now a services company”; “Apple is a hardware/software hybrid company”; “Apple is a software company with a platform”; “Apple is a (God forbid) phone company”…

    How about this pigeonhole…

    Apple is an experience company (tip of the hat to Neil Cybart).

    In essence, this seems to be where the true emotional sell/hook/devotion/soul and future of Apple as a company resides.

    On another note — I’m with @ Jerry Doyle on this Teooh experience.

    Pass the Jack, Jerry.

    Info is good PED. Keep ‘em coming.

    2
    October 9, 2019

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