Apple Stock Is Unstoppable: All-Time High Price, Record Valuation

Apple stock dipped into bear territory only about three months ago. Now, shares have made all-time highs once again. These three graphs reveal something interesting about Apple’s valuation today.
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After Apple shares entered bear market territory in September (a 20% decline from all-time highs), it looked like the stock would take a while to recover. But “a while” lasted only about three months.

On December 28, Apple ended the trading day valued at $136.69 per share. This was a historical peak for the Cupertino company, whose equity is now valued at over $2.3 trillion.

Peak price, peak valuation

The record price levels came on the back of rumors over the launch of the Apple Car as early as 2024.

I called the market’s knee-jerk bullishness overdone, but Apple shares kept climbing. In the five trading days between Reuters’ report and the last Monday of 2020, Apple gained 8% in market value.

But it is not only Apple’s share price that reached an all-time high. Valuation has also clinched record levels.

The chart below shows Apple’s P/E (price-to-earnings) ratio compared to itself over the past decade and to the S&P 500. Prior to 2020, the peak had been 30 times, in 2010. The ratio is now at 42.1 times.

The gap between Apple's and the S&P 500's P/E is now the widest that it has been since 2012 at least, at a premium of over 12 turns. As recently as early 2019, Apple traded at an earnings multiple that was 8 turns lower than the broad market's.

Source: Stock Rover

P/E is only one way to measure a stock’s valuation relative to the company’s business fundamentals. Another common metric used is EV/EBITDA (enterprise value-to-adjusted earnings).

Here, Apple continues to look very richly priced. The pre-2020 record had been 20.5 times. Now, Apple trades at an EV/EBITDA multiple of 24.9 times, head and shoulders above the S&P 500.

Source: Stock Rover

Lastly, one can also look at a stock’s market value relative to its tangible book value to assess how expensive shares may be. Apple is currently valued at what may look like an unreasonable 35.6 times, compared to a pre-2020 record of only 15 times.

Worth noting, the denominator of this metric has been reduced sharply over time due to Apple’s aggressive share buyback program. Still, few would argue that the stock looks inexpensive, judging by where this valuation multiple currently stands.

Source: Stock Rover

Fun fact: road to $3 trillion

Despite the rich multiples presented above, some believe that Apple still has quite a bit of room to grow.

Take Wedbush analyst Dan Ives as an example. His bull-case price target on the stock is $200 per share. Should he be right about the direction of the share price, Apple’s equity would be worth $3.4 trillion at the analyst's price target.

No company in the world has ever been valued at these levels. Not even close.

Twitter speaks

The Apple Maven is running a poll on Twitter on the subject of record price and valuation: what does this mean for Apple shares? Chime in below:

Explore more data and graphs

The data used in this report was provided by Stock Rover. I have been impressed with the breadth and depth of information on markets, stocks and ETFs that this platform provides. Stock Rover also helps to set up detailed filters, track custom portfolios and measure their performance relative to a number of benchmarks.

To learn more, check out stockrover.com and get started for as low as $7.99 a month. The premium plus plan that I have will give you access to all the information that went into my analysis and much more.

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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)