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Price-to-Sales (P/S)
For informational and educational purposes only • Not investment advice.
Apple
iPhone, services, devices
Estimated Fair Value
Stock price: $333.69
Fair value below stock price
This model estimates a company's fair value by applying its historical Price-to-Sales multiple to revenue.
Historical P/S Ratios
This chart shows the company's historical Price-to-Sales ratio by year.
Key Valuation Metrics
Notes
What is Price-to-Sales (P/S) Valuation?
Price-to-Sales (P/S) Valuation estimates a company's Fair Value based on its Revenue and the P/S multiple applied to that Revenue.
The P/S ratio compares a company's Market Capitalization with its Revenue. It shows how much investors are willing to pay for each unit of Revenue generated by the company.
Historical P/S 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 Revenue.
P/S Valuation can be useful for companies with negative or volatile earnings, but it does not directly account for profitability, margins or operating efficiency.
How the P/S Model Works
The Price-to-Sales model estimates fair value by calculating the company's historical P/S multiples, selecting a valuation P/S, and applying it to current Revenue to estimate Fair Value per Share.
P/S Formula
Key Model Assumptions
• Current Revenue is based on trailing twelve-month (TTM) results when four consecutive quarterly periods are available; otherwise, the latest annual revenue is used.
• Historical P/S ratios are calculated only for years with valid positive Revenue and market data.
• The 10 most recent valid historical P/S ratios are used to estimate the company's typical valuation multiple.
• The historical median P/S forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the historical median P/S.
• Historical P/S multiples may not remain representative if the company's growth, margins or profitability change materially.
Step 1 — Calculate Historical P/S Ratios
Historical Median P/S = 6.48x
The model calculates historical Market Capitalization and historical P/S ratios. The median of the 10 most recent valid P/S ratios is then used as Apple's historical valuation benchmark. The resulting median P/S is 6.48x.
Step 2 — Select the Valuation Multiple
The selected scenario adjusts the historical median P/S to determine the valuation multiple used to estimate Fair Value. Under the base scenario, the model uses a P/S multiple of 6.48x.
Step 3 — Estimate Fair Value per Share
The selected P/S multiple is applied to Apple's Revenue of $466.8B to estimate a Fair Market Capitalization of $3025.5B. Dividing this value by Shares Outstanding produces an estimated Fair Value per Share of $205.99.
Step 4 — Compare With the Current Market Valuation
Current P/S shows the multiple currently assigned to Apple's Revenue. The stock currently trades at 10.50x compared with a historical median of 6.48x.
The Valuation Gap compares the estimated Fair Value with the current stock price of $333.69. Under the current assumptions, the Valuation Gap is -38.3%.