Ya know, I've been thinking that when Apple's growth slows--which of course will happen, perhaps soon--to a more "normal" rate (the current rates of growth are just too crazy to wrap one's head around for these sized numbers) I think ironically that will be the catalyst for PE expansion.
In other words, when growth slows down to a level analysts are accustomed to seeing, I think they will finally start applying industry-normal metrics to Apple, which will hugely expand the PE. Maybe when Apple growth cools down to 15-20 percent, people will feel encouraged to give Apple a 15-20 PE. Which, of course, would double the stock price, at least.
Analysts are not at their best outside of their normal zone, numbers-wise. Seriously, what would Apple's stock price be like if it had a typical PE for the kind of growth Apple is currently experiencing? Something so stupidly ridiculous that no analyst could even think about going there.
So when the numbers are more in line with what people can cope with as being "realistic," I think it'll be good for the stock.
That, and a divvy....
-- Pete |
