Apple could still grow iPhone market share 50%. Based on their guidance, they are projecting 44% revenue growth next quarter and 35% EPS growth. YOY, that leaves them with about 25% revenue growth from $42 billion to $52 billion and negative EPS growth from $13.87 to $11.75, based on last years results and this quarter's guidance. I expect Apple will hit the $14 number to show a modest YOY improvement.
The one thing that hasn't happened thus far with Apple like most companies at this stage of the growth curve is negative feedback from option dilution, declining ASP's, or the other cost barriers that erode growth potential. If I were to look at December earnings, I see the the first sequential earnings decline for Apple in years. Let's assume they do $52 billion and earn $13.87 a share, it's still a ZERO growth comp from last year.
Apple still has one more good run ahead as everyone looks to strong guidance this quarter. Overall, I think the growth play in Apple is tapped out, but it's still the best company out there at 12 PE. Long term, it's still not overvalued, still a very normal valuation at it's PE/growth rate around 12%. |
