Apple's Earnings Expectations Have No Basis In Reality
by Josh Arnold
Apple (AAPL) reported earnings last month and although record revenue and profits were seen, shares were punished, falling almost $64 in one day to settle in the $450 area they still trade in today. So why did market participants punish Apple shares so harshly? Disappointing guidance was the culprit. To my view, the market has decided that Apple no longer knows how to make and sell its products and that the company is going to slowly die off in the coming years. Of course, this is ridiculous as Apple's domination among consumers is still intact. Apple is facing intense competition from the likes of Samsung and others but Apple's phone business is still enormous and carries with it huge margins. So what does the market actually expect out of Apple? We'll use a DCF analysis to put the pieces together and see what Apple's doomsday expectations look like. read more »
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