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Apple stock seen hitting $2,000 by the end of 2015

post #1 of 74
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Even if Apple's stock continues to trade at its relatively low valuation of just 14 times earnings, the company's rapidly ballooning earnings will force the stock up to $2,000 per share by the end of 2015, calculates independent analyst Andy M. Zaky.

Zaky, a frequent AppleInsider contributor, was profiled today by Fortune blogger Philip Elmer-DeWitt, who noted that "his estimates over the past four years have been considerably more accurate than your average Wall Street analyst."

In looking at Apple's performance long term, Zaky notes that Apple's "Trailing Twelve Months" (TTM), a figure that represents a company's financial performance over the last 12 months, is poised to more than triple over the next three years, largely due to continued growth in its iPhone sales.

Given that Apple is currently trading under 14 times its current TTM of $41.04 (closing today at $569.18), Zaky notes that by Q4 of 2015, the company's estimated TTM of $145.96 will make even the same conservative 14x P/E valuation result in a share price of $2,043.44, giving the company a two trillion dollar market cap, something the world has never seen before.



Zaky wrote, "I'm fairly confident about these numbers. Here's what I think will guide that: Q1 2013 = 55 million iPhones shipped. Q1 2014 = 80 million iPhones shipped. Q1 2015 = 110 million iPhones shipped."

Zaky further predicted, "2014 is the golden age of Apple and the peak growth year. After 2015, growth will stall and Apple will become a mature company -- at least for this era."
post #2 of 74

I guess the likelihood of this happening would be driven by whether or not our economy collapses again.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #3 of 74

Yet analysts predict that Apple's products will continue to lose market share to Android and Windows phones, tablets, PCs, whatever, and will dwindle to nothing in just a few years. And since market share is the only thing analysts seem to care about why would Apple's stock price go anywhere but down? lol.gif

post #4 of 74

Wow...one of the stupidest posts yet.  Stock analysts can't accurately predict prices 6 months down the road, so guessing what a stock will be worth 3 years from now is ludicrous!  The graph reminds me of Mark Twain's discussion of the "shortening" of the Mississippi River and the dangers of extrapolation.

 

It seems that all one needs to do to get covered in AppleInsider is mention Apple, no matter how silly what you say is.

post #5 of 74
Quote:
Originally Posted by SpamSandwich View Post

I guess the likelihood of this happening would be driven by whether or not our economy collapses again.

 

Its more a question of do you believe Apple can maintain its growth.  IF they don't introduce new products they will need to introduce lower line products in there categories.  They can't maintain that growth selling only premium products because they will saturate the premium segment of there markets.  

 

The iPad and iPods are doing great regarding price/value ratio, but the iPhone and mac lines are still premium products. They will need to find a way to do what they did with the iPad and be more competitive on prices.

post #6 of 74

Are these jokers flipping kidding me?

post #7 of 74
Quote:
Originally Posted by SpamSandwich View Post

I guess the likelihood of this happening would be driven by whether or not our economy collapses again.

The last collapse did nothing but drive it up.

I think a stock split would be in order before AAPL gets into Bershire Hathaway territory.
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post #8 of 74

I don't think you'll see this kind of predicted growth in the U.S., but maybe in China and if markets open up in India.    I think his projections are based on a false assumption:  that people will upgrade every year.   I think after a while, especially if future improvements are incremental, tedium will set in and people will be more likely to upgrade every three or even four years than every year.  This will be especially true of the economic problems in Europe are not resolved, although Apple has done incredibly well during the recession.   

 

Also, these sales levels can only be maintained if the cell phone service companies continue to subsidize the phones.   But if they should reverse strategy, because they've already saturated the market anyway or because they have enough viable alternatives in competitive Android phone models, and the phone once again becomes $500 to $700 at retail, I think you'll find sales drop in the toilet.   The iPhone did not become a success until AT&T started subsidizing the phone.   If it weren't for the subsidies, the iPhone would be owned primarily by CEOs, rich investors and celebrities.   

 

On the other hand, I have to believe that even aside from a supposed Apple TV, Apple is working long term on new product lines that we haven't even thought of yet, although we wouldn't necessarily see that within three years.    If they could pull off another product line that is as successful as the iPhone or iPad, the sky's the limit.   

 

I've written this before, but I think 10 to 20 years from now, Apple is an A.I. and robotics company.      I think Siri is the first baby step in this endeavor.   

 

I own the stock and would love to see it at $2K, but I think that's terribly optimistic.     Besides, the stock price isn't always related to performance....the stock has been down the past week because of the Europe/Greek crisis.     And I doubt Apple sells a lot of phone in Greece.    

post #9 of 74
Quote:
Originally Posted by Tallest Skil View Post

Are these jokers flipping kidding me?

Click the "contributor" link and read the earliest story by him posted there. You might well have said the same thing about his comments on Apple's future pricing then as well.

Had we but known we would have said what you did about all the other analysts who got it so wrong.
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post #10 of 74

I can also see Apple stock hitting a cat and making road kill.

An Apple man since 1977
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An Apple man since 1977
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post #11 of 74
I love how you showcase analyst comments that are grossly pro apple but bash or not post the not so favorable articles.
post #12 of 74
Quote:
Originally Posted by zoetmb View Post

The iPhone did not become a success until AT&T started subsidizing the phone.   If it weren't for the subsidies, the iPhone would be owned primarily by CEOs, rich investors and celebrities.

Isn't this a bit like saying that if the queen had balls she'd be king? All phones are subsidized. Virtually.
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post #13 of 74

Camouflage BDU's and extreme threat along with 7.62 mm belt fed M60 = PTSD and a who gives a F%$# attitude any more.  Thanks for the complement.  Have a nice day.  By the way would you mind hitting me in the head the left side so I can have a balanced head injury?  Thanks man your the greatest.  :)

An Apple man since 1977
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post #14 of 74
Why stopping at 2015? If it quadruples every 2.5 years then it will value:
At $8000 by middle of 2017.
At $32000 by 2020
At $512000 by 2025
And by 2030 todays share (not taking future splits into account) will worth $2 Million!!!
So get on while it's cheap!!!
post #15 of 74
Quote:
Originally Posted by anfboymn View Post

I love how you showcase analyst comments that are grossly pro apple but bash or not post the not so favorable articles.

This is a site for Apple fans. If you want to see the bashing articles go to Android Insider.

It's easy to find negative press about Apple . . . EVERYWHERE. This is a place for a welcome respite. Now go back to where you came from "An Fan Boy."
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post #16 of 74

$2000? Yeah sure good luck with this anal-ysis. What's happened someone's bought in at $600 and are feeling a little queasy. 

post #17 of 74
Just for the record, the original business plan for Underpants Gnomes was the following:

Phase 1. Collect underpants
Phase 2. Buy Apple
Phase 3. Profit!
The recent false claim that iCloud was hacked has shaken my ability to trust those people who would steal my photos and post them online without my permission...
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The recent false claim that iCloud was hacked has shaken my ability to trust those people who would steal my photos and post them online without my permission...
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post #18 of 74
Quote:
Originally Posted by herbapou View Post

 

Its more a question of do you believe Apple can maintain its growth.  IF they don't introduce new products they will need to introduce lower line products in there categories.  They can't maintain that growth selling only premium products because they will saturate the premium segment of there markets.  

 

Ultimately, the majority of apple sales come from ipad and iphone.  Closing in on 75% of their revenues.  They are still within the growth phase of the smartphone and tablet market.


When this amrket becomes a little more saturated.  When hte iterations are even less attractive to upgrade to.  Diverging into cancer research?  really?.

Household: MacBook, iPad 16gb wifi, iPad 64gb wifi, iPad Mini 32gb, coming iPhone 5S, iPhone 4S 32gb, iPhone 32gb, iPod Touch 4th gen x1, iPod nano 16gb gen 5 x2, iPod nano gen 3 8gb, iPod classic...
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Household: MacBook, iPad 16gb wifi, iPad 64gb wifi, iPad Mini 32gb, coming iPhone 5S, iPhone 4S 32gb, iPhone 32gb, iPod Touch 4th gen x1, iPod nano 16gb gen 5 x2, iPod nano gen 3 8gb, iPod classic...
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post #19 of 74
Quote:
Originally Posted by AppleInsider View Post

Zaky, a frequent AppleInsider contributor, was profiled today by Fortune blogger Philip Elmer-DeWitt, who noted that "his estimates over the past four years have been considerably more accurate than your average Wall Street analyst."

 

Quote:
Originally Posted by anfboymn View Post

I love how you showcase analyst comments that are grossly pro apple but bash or not post the not so favorable articles.

 

The fact is Zaky hasn't been just better than average...he has consistently been one of the most accurate analysts anywhere.

It's not a issue of being pro-Apple or anti-Apple...it is about having a track record of being correct.

post #20 of 74

Its interesting to see who is behind these anal-ysis. Its the same kind of institutional investors who pushed the individual investors to put their money while the race was on this year and then pulling the money out of the market big time. People like me are still scratching the heads trying to understand why the Apple stock slid 11% in the past few weeks, in-spite of a stellar Q1 performance. I saw so many folks here waiting for a market correction while the stock was at $485, but it continued its climb. Just when the results were out and over performed the estimates, it started to slide. 

$2000 mark may seem achievable, considering the markets that Apple is yet to tap onto. But that will also be the target assuming Apple will continue to stash the cash without paying any dividends. After all, its the IP plus the company value that will multiply into the market cap and the share price. I'm I correct?  Please dont talk Facebook crap, its just another MySpace bubble that investors have created, shouting to everyone that the sh*t is worth 100B.

post #21 of 74
Quote:
Originally Posted by anfboymn View Post

I love how you showcase analyst comments that are grossly pro apple but bash or not post the not so favorable articles.

 

Andy Zaky has a good track record in his predictions, so it makes sense to listen to him.

 

Personally, I suspect that Apple's profits will double twice more in the next three years, with iPad passing the PC in worldwide sales and iPhone benefitting from its halo.  I think the stock price will only double once, though, because people just don't believe what they see.  So a trailing P/E of 7, and really only 6 excluding cash on hand.

post #22 of 74

I have a hard time believing that Apple can get to 110 million iPhones per quarter using its current high-margin, subsidised phone model. They'd need to enter the prepaid market and that would bring margins more in line with the iPad, reducing earnings growth somewhat.

post #23 of 74

I think we're not seeing the big picture.

 

If Apple releases no more new lines of products (eg no iPanel, iCar, iCondo, iPacemaker, etc), 2015 is probably going to be the peak of viable miniature improvements to the iPhone, iPad, and similar nano devices are going to hit a wall unless there is a breakthrough to go past the 10nm process. 

 

Even if the wireless companies stop subsidizing the phones, that doesn't reduce demand for them. The average person replaces their phone at 18 months, because people don't perceive their phones having any value when subsidized. Instead of replacing the phone at 18 months they'll replace it after 7 years once the NAND flash wears out. Aftermarket repairs can be done to prolong the screen and battery life. 

 

Android devices barely last long enough to not have to be replaced at 18 months. 

post #24 of 74
Quote:
Originally Posted by Robin Huber View Post


Click the "contributor" link and read the earliest story by him posted there. You might well have said the same thing about his comments on Apple's future pricing then as well.
Had we but known we would have said what you did about all the other analysts who got it so wrong.

 

I did... and found this gem in his first AI post from two years ago: "Research in motion (RIMM) is a fundamentally sound institution that is clearly undervalued on any widely accepted metric of valuation. That doesn’t stop the inefficient market from pricing the stock at less than half of what ought to be worth. Every stock, including Apple, is at the whim of the larger concerns of the broader market."  Makes one wonder if he's just an optimist who's found an optimist's stock to be right about, or if he's really actually good at evaluating fundamental value.

post #25 of 74
Quote:
Originally Posted by Booga View Post

I did... and found this gem in his first AI post from two years ago: "Research in motion (RIMM) is a fundamentally sound institution that is clearly undervalued on any widely accepted metric of valuation. That doesn’t stop the inefficient market from pricing the stock at less than half of what ought to be worth. Every stock, including Apple, is at the whim of the larger concerns of the broader market."  Makes one wonder if he's just an optimist who's found an optimist's stock to be right about, or if he's really actually good at evaluating fundamental value.

Remember that his expertise is Apple, not RIM. That's where the accuracy is, and that was the focus of the article. You're reaching for an exception that has nothing to do with the rule.
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post #26 of 74
Quote:
Originally Posted by GTR View Post

Just for the record, the original business plan for Underpants Gnomes was the following:
Phase 1. Collect underpants
Phase 2. Buy Apple
Phase 3. Profit!

Heh.

 

That exact plan has worked out remarkably well for me over the years, skipping right over step 1. I was an idiot when I bought a f--kton of AAPL back in 2002. I'm still an idiot, with a really sweet pile of cash, built on a foundation of AAPL long.

 

So, GO UNDERPANTS GNOMES!!!12!!@!!!!! FTW!

 

Financial analysts are, well, financial analysts.  If somebody were actually an investment genius, why on Earth would they be getting paid by the article to grind out vapid drivel for financial blogs.  I can't think of anybody who listens to any of 'em, at least nobody I know who actually makes any money in the markets.

post #27 of 74

I love how people slam Apple till earnings are announced lol.gif

post #28 of 74

Will others catch is the questions...and the hardest place to catch up will be that Apple is building regional retail stores with customer service who's doing to do that ...Google,Samsung,Microsoft.

 

Amazon is the best position to improve but there need to get into the hardware game in a bigger way...dont see anyone catching up...as long as everyone is copying the MBA and the ipad continues to be a market leader and Iphone is clearly not going anywhere ..Apple will continue to grow globally...it will lose it's cool fact if big changes are made in the wrong way and for investors and not customers.

post #29 of 74

Um.  Apple stock went up too much too fast and now it is just settling in until they release more products and more financial reports.  Before the Dec 2011 quarter ended, they were making around $6 or $7 a share per quarter, then Apple blows out the Dec 2011 quarters by double previous quarters.  Then the quarter ending March 2012, they continue basically at around the same levels.  Was Apple making $12 to $14 a share in a quarter an anomaly or is it what they are to expect?  But basically these analysts have their trend lines that they are using and based on the upward momentum and the undeniable fact that the iPads are still selling better each year, the iPhones are selling well, even the Macs are still at a growth rate and the various products they have planned for this year and the continuous trends over the next 3 years or so, this is what they are predicting.  Yes, it is possible to predict Apple's stock, but the problem is that their financials are growing at an exponential rate and some are just downright blown away that their quarterly reports have not shown any sign of retracting.  Some people are nervous because we are going into the summer months, which is typically slower than the other months.  Also, more and more corporations and other entities that don't normally use computers are using iPhones to perform tasks that a phone or a computer is not normally used.  Example.  Amtrak using iPhones for the conductors.  So, these devices are finding new uses where they aren't really replacing a computer, they are creating new uses that were done completely different.  iPhones are replacing cash registers at places like Nordstrom.   Taxi cabs are using iPads instead of using a meter designed just for Taxi cabs.  Things like that are cropping up and it is just a new generation of computing devices people are still trying to figure out the growth for these new markets.


Edited by drblank - 5/9/12 at 8:31pm
post #30 of 74

They probably want the stock to go down so they can buy in at a lower price point.  I don't have any Apple stock, but I would LOVE to be able to afford some.

post #31 of 74

The subsidy issue is such a red herring. Android phones are subsidized just as much as iphones. Now if someone can magically come up with an Android phone that is "good enough" and costs $99 retail, then maybe there's something to worry about. 

post #32 of 74

Someone on the Motley Fool did a video on what Apple will do over the coming years, have never been able to find it since, couldn't bookmark the damn thing, but TBH, I think Zaky's pretty close to what will happen.

 

Apple has several years of massive growth ahead of it.

 

The iPad has become the "iPod" of tablets, the iPhone continues to be a gateway device to other Apple devices, everyone and their cousin has copied the MBA, we haven't seen anything yet.

post #33 of 74

You know, Apple will get wiped out when Windows 8 and Windows Phone 8 hit the market later this year.

...And then Steve Ballmer woke up.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #34 of 74
Quote:
Originally Posted by Bwana_Dik View Post

Wow...one of the stupidest posts yet.  Stock analysts can't accurately predict prices 6 months down the road, so guessing what a stock will be worth 3 years from now is ludicrous!  The graph reminds me of Mark Twain's discussion of the "shortening" of the Mississippi River and the dangers of extrapolation.

It seems that all one needs to do to get covered in AppleInsider is mention Apple, no matter how silly what you say is.

"There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact. "
post #35 of 74
Quote:
Originally Posted by Robin Huber View Post

Isn't this a bit like saying that if the queen had balls she'd be king? All phones are subsidized. Virtually.

Not all phones are subsidized. Besides, it's a well known fact that the iPhone gets a higher subsidy than most phones, partly explaining its success in the US:

Verizon soaking high end Android buyers to make up for iPhone subsidies

Subsidies for Apple's iPhone are 40% higher than the industry average
post #36 of 74

Saw this a couple of days ago - seems quite appropriate!

 

The Official Dilbert Website featuring Scott Adams Dilbert strips, animations and more

post #37 of 74

Always such a jittery, fearful bunch out there in Investor-Land. Remember, oh.. say.. 6 months ago, when AAPL was at a 13 P/E and plummeting down below $370? Everyone was saying how impossible Zaky and those other logically righteously bullish Analysts were saying $600+? I remember members saying snarky and "it'll never get there!" type stuff, as if they couldn't do the math that in logical Apple style growth, and even at a depressed P/E level, it was very possible.


At THIS very moment, with a 26 P/E ratio, AAPL would be at $1,200 a share. AAPL hit an 18 P/E just before the downward momentum before they announced incredible earnings (100% YOY growth! And this is after years and years of naysayers saying the tired "they can't keep it up").

 

Apple's growth will not stop anytime soon, they have new products in the pipeline, they're just getting started worldwide, namely in China and in emerging markets, and haven't even signed a deal with China's largest carrier yet (CHINA HAS JUST SURPASSED THE U.S IN PHONE SUBSCRIPTIONS.... AAPL WILL SEE PROBABLY 500%+ GROWTH IN CHINA WITHIN THE NEXT 5 YEARS).

People can get emotional about this all they want, as they just focus on "high ticker prices", but they were saying this about $500 when LOGISTICS were saying AAPL should get there, even as near as a half a year ago. This article states fundamental, very simplified reasons as to how AAPL will get there EVEN WITH a depressed P/E, therefore, in the near future, $2,000+ can and will happen, unless THE COMPANY flubs. Zaky has a track record of being on point with the general direction of Apple and its growth (and its stocks growth). Tim Cook and co have clear mission from Steve Jobs, and are hungry as ever to fulfill it, and WILL NOT settle for ruining the worlds most successful company. These guys are after blood, and your best bet is to bet on them.

post #38 of 74

Some see logic...

Some read the headlines and get a *boing* in their shorts.

 

Guarantee you that a  7" Apple device exposes the fanboi's here - as long as the stock rockets up.

 

Steve is dead no less then half a product cycle and he's already forgotten to the fold of opportunist investors.

post #39 of 74
if it happens great!... (for those who bought apple stock early)... so...but...well...

it will not happen, the stock price of apple will hover around 600 like a forever skipping rock across the water level of 600 dollars

somebody must be "shorting" the apple stock so that they can get "FREE" money,(so to speak) and because IMAO shorting a stock " removes" value from it (meaning prevents a stock from increasing) it will remain around 600 +/- 10%...

more likely it will stay around 600 because of the buy/selling of the stock to keep it around 600. (stock brokers' gettin' paid! LOL)

go ahead, I dare you, buy it!...
post #40 of 74
Quote:
Originally Posted by haar View Post

if it happens great!... (for those who bought apple stock early)... so...but...well...
it will not happen, the stock price of apple will hover around 600 like a forever skipping rock across the water level of 600 dollars
somebody must be "shorting" the apple stock so that they can get "FREE" money,(so to speak) and because IMAO shorting a stock " removes" value from it (meaning prevents a stock from increasing) it will remain around 600 +/- 10%...
more likely it will stay around 600 because of the buy/selling of the stock to keep it around 600. (stock brokers' gettin' paid! LOL)
go ahead, I dare you, buy it!...

That's just as insane a view as mindless optimism.

Share prices are based on the market's perception of the value of the company (i.e., total corporate value divided by the number of shares in existence). The value of the company is determined based on:
Earnings
Future growth potential
Assets

Assets are increasing - cash is accumulating faster than the dividend will distribute it and Apple is making major investments in new facilities
Earnings have been steadily increasing for years. In fact, earnings have increased faster than the share price, so the PE ratio has been dropping (which suggests that the market expects future growth to slow down).

The market average is a PE of around 18. That says that a company growing at market rates should trade at 18 times earnings. If it's growing faster than the market rate (which is just a few percent per year), the PE would be higher (an old rule of thumb is that you add the growth differential to the PE and if the market is at PE of 18 and you're growing faster than the market, the PE for your stock should be 23 - although that rule of thumb is a very weak one). Apple's PE is around 13 (or closer to 10 if you back out the cash). That suggests that the market believes that Apple will grow substantially slower than the market in the next few years.

Personally, given Apple's history and public guidance, I have a hard time believing that it will grow slower than the market for the next few years, so I believe that the stock is undervalued by that metric. Zaky has assumed constant PE while Apple continues to grow at rates of the past few years. Assuming constant PE is a very reasonable assumption since it takes quite a bit to change that ratio. I'm not as comfortable with his growth assumptions. While I expect Apple to continue to grow at double digit rates, I have to believe that its competition won't remain hapless forever and they will manage to reduce Apple's growth rate somewhat. In addition, there's the 'Apple Effect'. Apple stock seems to be incredibly sensitive to inane stories drummed up by the media. Every time someone drums up some silly "Apple is dying" story, the share price drops precipitously. So it's possible that FUD might affect the share price (although this effect seems to be tapering off lately - there have been too many attempts to bring Apple down over the past 6 months and they're losing their impact).

In short, I think Zaky might be a little too optimistic because his assumptions require that Apple's competition fails to make a significant comeback and I don't see that. But assuming that it's going to stay around $600 is even more absurd.
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