| | | Remember, cash balance is much smaller now, and you're talking about multiples of current earnings. First, cash balance is neither "much" smaller or likely any smaller at all nearly 2/3 through the current quarter. You need to do more homework before you throw out comments that appear as flippant as yours routinely do, because you are wasting everyone's time and before long you'll engage no one in discussion. Review how much fcf Apple generates in a quarter. It is hard to fathom but it is there to see in black and white.
Second, "we" weren't talking about multiples of current earnings. I said fcf. And in trailing fcf Apple's multiple is about 8.5x and about 7x ex cash. If you want to talk earnings, the multiple is about 12x and about 9.5x ex cash. Expectations are low, discounting little to no growth.
Your expectations are clear. They are consensus expectations. Consensus expectations have always underestimated new Apple product categories prior to and up to a year following product launch. Nothing new.
As for your running experience, one of the first things you learn in business school is not to forecast sales on the basis of your own tastes and pocket depth. Whether I'm running or mountain biking, I don't like having to rely on a smartphone to see simple display functions. Maybe my pockets are deeper than yours or maybe I run and bike even more but, I'd love a display that plugs into the Apple ecosystem that is visible and accessible when I'm outdoors.
Apple's multiples won't remain where they are. If you want a precedent, track Google's share price malaise between late 2007 and mid year 2012. |
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