DCF Studio

    AAPL · NMS · Technology

    Apple Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 87.50

    Market price

    USD 336.13

    Implied upside

    -74.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Current EV/EBITDA of 34.2x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 87.50-74.0%
    Exit multiple
    USD 157.56-53.1%
    Market price
    USD 336.13

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn61bn123bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 423.7bnUSD 431.4bnUSD 439.2bnUSD 447.2bnUSD 455.3bn+1.8%
    EBITUSD 130.9bnUSD 133.3bnUSD 135.7bnUSD 138.2bnUSD 140.7bn+1.8%
    NOPATUSD 110.1bnUSD 112.1bnUSD 114.1bnUSD 116.2bnUSD 118.3bn+1.8%
    Add depreciation & amortisationUSD 12.2bnUSD 12.5bnUSD 12.7bnUSD 12.9bnUSD 13.2bn+1.8%
    Less capital expenditureUSD -11.7bnUSD -11.9bnUSD -12.1bnUSD -12.3bnUSD -12.6bn+1.8%
    Less increase in working capitalUSD 3.6bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.8bn-1.8%
    Free cashflow to firmUSD 114.2bnUSD 116.3bnUSD 118.4bnUSD 120.5bnUSD 122.7bn+1.8%
    Discount factor0.95040.85840.77530.70030.6325-
    Present valueUSD 108.5bnUSD 99.8bnUSD 91.8bnUSD 84.4bnUSD 77.6bn-8.0%
    Present Value Of The ForecastUSD 462.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.057Reported 1.085, pulled toward 1.0 (Blume)
    Cost of equity10.81%Risk-free + beta x equity risk premium
    Cost of debt7.00%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 4905.5bn98.0% of capital
    Total debtUSD 98.7bn2.0% of capital, book value as a proxy
    Tax rate15.9%Effective, capped at statutory
    WACC10.71%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 87.50

    66% of EV

    Forecast FCFF, final year
    USD 122.7bn
    Capex at depreciation, working capital in reinvestment
    USD 118.3bn
    Less reinvestment at g/ROIC (4.2% of NOPAT)
    USD -4.9bn
    Capitalised
    USD 113.4bn
    ROIC (reported)
    60.0%
    Terminal value, undiscounted
    USD 1414.6bn
    Terminal value, discounted
    USD 894.8bn
    Enterprise value
    USD 1356.9bn
    Less net debt
    USD 44.0bn
    Equity value
    USD 1312.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 157.56

    81% of EV

    Terminal value, undiscounted
    USD 3076.5bn
    Terminal value, discounted
    USD 1946.0bn
    Enterprise value
    USD 2408.1bn
    Less net debt
    USD 44.0bn
    Equity value
    USD 2364.1bn

    Spread between methods: 57%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.71%103.47108.71114.78121.91130.40
    9.71%91.1194.9299.26104.23110.00
    10.71%81.4384.2987.5091.1295.24
    11.71%73.6375.8478.2881.0084.05
    12.71%67.2268.9670.8672.9675.28

    Outlined: this model. Green text: above today's price of 336.13. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year1.8%34.1%+32.3pp
    Discount rate10.7%4.6%-6.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.