AAPL: The Variance Between Apple's Intrinsic Value And Analyst Estimates

The Variance Between Apple's Intrinsic Value And Analyst Estimates
by Derek Chipman

Despite the individuals who have established a long position in Apple (AAPL) based upon strong vested interest in Apple's business model, there are a significant number of market participants who exhibit a highly short-term driven approach to analyzing Apple's performance. Whether the topic of focus for these short-term oriented individuals involves analyzing intra-day price fluctuations or changes in events from day-to-day, they both create an issue of credibility. Predictions made concerning the long-term future of Apple are inconclusive when they are made by analyzing trading patterns over a couple of days. In actuality, it makes me wonder what ever happen traditional or even modern methods of valuation. The market capitalization of Apple is enormous and you will realize I am not here to classify these short-term investors as market makers. I am simply trying to recognize the fact that there is tremendous amount of daily publications that are hyper-focused on making predictions about the future performance of Apple, while the underlying assumptions are made solely based on Apple's attributes revealed in one day. In light of this, I have made a strong attempt to veer away from traditional articles that make speculative bets on the future of Apple's stock price. The typical fundamental discussion has been excluded because I am sure you have read your fair share of those already. This article analyzes the variation in price targets for Apple, provides a valuation model to help place an value on Apple's operations, and last concludes with an estimated intrinsic value per share. read more »

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