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Makes Apple's recent $88B quarter seem gargantuan. Apple's quarterly profit is nearly half of Google's quarterly revenue. These companies have a very similar
by gxs 9y ago
Makes Apple's recent $88B quarter seem gargantuan.
Apple's quarterly profit is nearly half of Google's quarterly revenue.
These companies have a very similar valuation.
Is the proper way to interpret this that investors are a lot more optimistic about Google's future vs Apple's?
- deleted 9y ago[deleted]
- deleted 9y ago[deleted]
- JTon 9y ago> Is the proper way to interpret this that investors are a lot more optimistic about Google's future vs Apple's? I've read institutional investors don't see Apple having sufficiently diversified revenue streams to warrant a higher P/E. Something around 60% of their revenues come from iPhone alone.
- rising-sky 9y agoAnd Google's revenue diversification?
- jpatokal 9y agoFrom the friendly article: Non-advertising revenue from Google combined with revenue from Verily and the other Alphabet companies was $15.5 billion in 2017, accounting for about 14 percent of total revenue, compared to $10.9 billion, or 12 percent, in 2016. Not much in total percent terms because of how huge the ads business is, but if you look at it on its own, that's up 50% and $5 billion YoY.
- rising-sky 9y agoDeducing solely from your comment then, Google and other Alphabet companies advertising revenue was 86%? That's seems a lot less diversified than Apple's 60% from iPhones...
- icebraining 9y agoYou can put ads in a lot of places, it's not really the same as a single product line.
- yeldarb 9y agoApple's multiple has always been much lower than almost every other tech company. It's always seemed completely irrational to me.. which is why I hold a lot of AAPL. They continually grow, make a boatload of money every quarter, and pay a good dividend. For reference, P/E Ratios: AAPL 18.26 GOOG 38.9 MSFT 63.9 FB 35.8 AMZN 350.9 IBM 36.6 HPE 66.7 NFLX 211.9
- nostromo 9y agoYou forgot my favorite P/E, Salesforce's: 14,776
- opportune 9y agoThat's not necessarily bad, it could just mean they're re-investing basically all of their would-be earnings into themselves
- icelancer 9y agoThey basically are.
- fancyfacebook 9y agoIt's a fraction with a numerator and denominator. The demoniator can be 0.00001 sometimes. Any PE over 50 or so is effectively meaningless, everyone in finance knows to just ignore them at look at better valuation metrics. Also there's a pretty good argument that the PE is a useless ratio that should be actively ignored, they haven't correlated strongly with anything in like 20 years.
- lorenzhs 9y agoHow does that work, accounting-wise? Isn't re-invested capital coming out of profits by definition? Otherwise a company could just "re-invest" all their would-be profit into gold (or some other store of value) and claim to have made zero profit. I don't think the IRS would be too happy about that.
- mrlinx 9y ago
- robryan 9y agoIsnt it mostly just that phones have a lower profit margin than digital ads?
- gxs 9y agoWe're talking absolute numbers here, not margins or percentages.
- aetherson 9y agoYes, the proper way to interpret this is that investors are a lot more optimistic about Google's future vs. Apple's. Investors see in Apple a company that serves hardware to a mature market, while in Google they see a company that mainly produces software in fairly diversified markets. Investors may be wrong of course.
- ianamartin 9y agoInvestors hate Apple because Apple hates investors and routines gives them the middle finger. Apple doesn't play their game and do what they want, so the people who invent these metrics fuck with them. And funny enough, Apple wins in this exchange because they can buy back more shares faster when the prices are low. Apple is laughing all the way back to private ownership.
- jacksmith21006 9y agoBecause of growth difference is why you see a difference in P/E between Google and Apple. iPhone unit sales actually declined for Apple YoY.