Apple P/E | Valurator

For informational and educational purposes only • Not investment advice.

Apple

iPhone, services, devices

Estimated Fair Value

$238.27

Stock price: $333.69

Fair value below stock price

This model estimates a company's fair value by applying its historical Price-to-Earnings multiple to Earnings per Share.

Historical P/E Ratios

This chart shows the company's historical Price-to-Earnings ratio by year.

Key Valuation Metrics

Selected P/E Scenario

Notes

• The current Price-to-Earnings (P/E) ratio is meaningfully above the median, indicating the stock is trading at a higher valuation multiple than it has historically.

• The historical Price-to-Earnings (P/E) range is wide, meaning the valuation is sensitive to which historical multiple is used.

What is Price-to-Earnings (P/E) Valuation?

Price-to-Earnings (P/E) Valuation estimates a company's Fair Value based on its earnings and the P/E multiple applied to those earnings.

The P/E ratio compares a company's share price with its Earnings per Share (EPS). It shows how the market values the company in relation to the earnings it generates.

Historical P/E ratios show the valuation multiples at which the company has traded in the past. They can be used as a reference for estimating Fair Value from the company's Earnings per Share.

P/E Valuation is most useful for profitable companies with relatively stable earnings and a meaningful historical P/E range.

How the P/E Model Works

The Price-to-Earnings model estimates fair value by calculating the company's historical valuation multiple, selecting a valuation P/E, and applying it to Earnings per Share.

Historical Prices & EPS

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Calculate Historical P/E

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Select Valuation P/E

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Apply to EPS

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Fair Value per Share

P/E Formula

\text{P/E Ratio} = \frac{ \text{Share Price} }{ \text{Earnings per Share (EPS)} }

Key Model Assumptions

• The company must have positive Earnings per Share.
• The current EPS input is based on trailing twelve-month (TTM) earnings when four consecutive quarterly periods are available; otherwise, the latest annual EPS is used.
• Historical P/E ratios are calculated only for years with valid positive earnings.
• The 10 most recent valid historical P/E ratios are used to estimate the company's typical valuation multiple.
• The median historical P/E forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the median historical P/E.
• Historical valuation multiples may not remain representative if the company's growth, risk or profitability changes materially.

Step 1 — Calculate Historical P/E Ratios

Historical P/E = Year-End Share Price / Historical EPS

Historical Median P/E = Median of the 10 most recent valid historical P/E ratios
Historical Median P/E = 27.36x

The model calculates historical P/E ratios from historical share prices and Earnings per Share. The median of the 10 most recent valid P/E ratios is then used as Apple's historical valuation benchmark. The resulting median P/E is 27.36x.

Step 2 — Select the Valuation Multiple

Selected P/E = Historical Median P/E × Scenario Adjustment (Base)

Selected P/E = 27.36x × 100% = 27.36x

The selected scenario adjusts the historical median P/E to determine the valuation multiple used to estimate Fair Value. Under the base scenario, the model uses a P/E multiple of 27.36x.

Step 3 — Estimate Fair Value per Share

Fair Value per Share = EPS × Selected P/E

Fair Value per Share = $8.71 × 27.36x = $238.27

The selected P/E scenario is applied to Apple's Earnings per Share of $8.71 to estimate a Fair Value per Share of $238.27.

Step 4 — Compare With the Current Market Valuation

Current P/E = Current Price / EPS

Current P/E = $333.69 / $8.71 = 38.31x

Valuation Gap = Fair Value per Share / Current Price − 1

Valuation Gap = $238.27 / $333.69 − 1 = -28.6%

Current P/E shows the multiple currently assigned to Apple's earnings. The stock currently trades at 38.31x compared with a historical median of 27.36x.

The Valuation Gap compares the estimated Fair Value with the current stock price of $333.69. Under the current assumptions, the Valuation Gap is -28.6%.