Apple’s Valuation in 2007 – Part Art and Part Science


In 2007, Apple was trading at $25 per share and it has a Price to Earnings (P/E) Ratio of 38.

Many may have thought the stock was expensive and that the company was possibly going mad.

Apple was about to compete with Nokia, Motorola, Siemens, Blackberry & Sony Ericsson and produce a mobile phone.

The first iPhone was released on June 29, 2007.

Well, earnings grew as did the stock price and the P/E ratio dropped.

Finding a bargain doesn’t always mean a low P/E ratio.

In Apple’s case, investors were looking at what the earnings were going to be, rather than what they have been.

Today, the stock price is $365 and its P/E is 30.

1 July 2020
by Rob Zdravevski
rob@karriasset.com.au

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