Apple (AAPL, Financial) and Exxon Mobil (XOM) have been competing with each other to be the largest publicly traded company in the world. Since the end of November last year, AAPL’s price has been shooting up dramatically. The share price went from $360 to $503, a 40% increase in nearly three months.
With that significant price increase, AAPL is considered the largest publicly traded company now. Its market capitalization is $468.6 billion. For XOM, its market capitalization is nearly $400 billion, with the share price of $84.5. Since January 2009, AAPL stock has been on a continuously increasing trend. The stock rocketed from $82 to $503, a jump of more than five times in just three years.
On January 24, the company reported that its sales had increased 73% from a year ago, while net income had increased 100% from the prior year, reaching $13 billion for the quarter ended in December 2011. In addition to the recent growth in its operating result, on the conference call, CFO Peter Oppenheimer said that the board was in “active” discussion about how the company should use its $30 billion cash on hand. That might imply a dividend payment to shareholders in the near future.
AAPL has a very solid financial structure. The company is debt free, and it holds more than $30 billion in cash. If we adjust the cash level, the enterprise value is $438.6 billion. The market is valuing AAPL at 14.3x P/E, 5.2x P/B and 10.4x P/CF, whereas its five-year average valuation is 21.9x P/E, 5.7x P/B and 12.5x P/CF (P/CF valuation uses three-year average).
Its trailing 12-month operating cash flow is $45.3 billion, and its free cash flow is $38 billion. If we apply the historical three-year average cash flow valuation into the current operating data, AAPL's intrinsic value should be around $566.2 billion, with the approximate value of $607 per share.
Disclosure: No position
With that significant price increase, AAPL is considered the largest publicly traded company now. Its market capitalization is $468.6 billion. For XOM, its market capitalization is nearly $400 billion, with the share price of $84.5. Since January 2009, AAPL stock has been on a continuously increasing trend. The stock rocketed from $82 to $503, a jump of more than five times in just three years.
On January 24, the company reported that its sales had increased 73% from a year ago, while net income had increased 100% from the prior year, reaching $13 billion for the quarter ended in December 2011. In addition to the recent growth in its operating result, on the conference call, CFO Peter Oppenheimer said that the board was in “active” discussion about how the company should use its $30 billion cash on hand. That might imply a dividend payment to shareholders in the near future.
AAPL has a very solid financial structure. The company is debt free, and it holds more than $30 billion in cash. If we adjust the cash level, the enterprise value is $438.6 billion. The market is valuing AAPL at 14.3x P/E, 5.2x P/B and 10.4x P/CF, whereas its five-year average valuation is 21.9x P/E, 5.7x P/B and 12.5x P/CF (P/CF valuation uses three-year average).
Its trailing 12-month operating cash flow is $45.3 billion, and its free cash flow is $38 billion. If we apply the historical three-year average cash flow valuation into the current operating data, AAPL's intrinsic value should be around $566.2 billion, with the approximate value of $607 per share.
Disclosure: No position
