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AAPL is still undervalued compared to stocks like AMZN. Apple's P/E of 17 is amazing compared to Amazons 78. I'm not really sure why their stock isn't traded wi
by capkutay 7y ago
AAPL is still undervalued compared to stocks like AMZN. Apple's P/E of 17 is amazing compared to Amazons 78. I'm not really sure why their stock isn't traded with the same enthusiasm that other tech companies see.
- jvagner 7y agoApple will never get the same P/E love, because they only make like 4 things (Mac, iPhone, iPad, services). Everyone loves to hate on Apple on multiple fronts (elitist, expensive, over the hill), whereas the hate on Amazon is really about one thing.. that ol "makes no profit" canard. CLARIFICATION: I’m talking perception, not my beliefs. Uber’s a scam, as far as I can tell, but they will either pull off a miracle or be the biggest Groupon of all time. And Snap isn’t very good at being a public company.
- Fnoord 7y ago> whereas the hate on Amazon is really about one thing.. that ol "makes no profit" canard. Ahem [1], and while we're at it, [2] My criticism to Apple isn't that they're being expensive; it is related to right to repair and their constant efforts to hamper that. Amazon just undercuts everyone, and Turk globalizes cheap workforce. For ridiculous low payment. These are just 2 examples you did not mention. You can read more in the sources below. [1] https://en.wikipedia.org/wiki/Criticism_of_Amazon https://en.wikipedia.org/wiki/Criticism_of_Amazon [2] https://en.wikipedia.org/wiki/Criticism_of_Apple_Inc https://en.wikipedia.org/wiki/Criticism_of_Apple_Inc.
- jvagner 7y agoI don’t disagree with that, but I don’t think the market cares about that.. w/r/t Apple. I wish they weren’t targeting the masses so completely. iPhones shouldn’t have the absolute worst charging tech in the box.
- privateSFacct 7y agoPeople have historically been willing to pay apple more because in part of how seamlessly integrated their products are. I bought a “repairable” android and it was junk / not updated. My old iPhones have kept value far better than friends androids after 3 years. Apple is doing something that preserves phones value (ie, they may actually maintain them for longer with updates etc vs their “repairable” competitors. And I’ve never had a problem getting my phone repaired
- kondro 7y agoWhat’s Salesforce’s P/E again? Or Facebook or Twitter or Uber or Snap?
- Godel_unicode 7y agoFor the curious: 105, 33, 13.55, 2366, -19, respectively.
- outside1234 7y agoAmazon makes a very small amount of profit for its sales. If they were forced to split out AWS, they would make no profit. Also a fact. That is a pretty scary place to be.
- tonyedgecombe 7y agoI wonder if the distribution side of the business will ever become profitable. I know the argument is that once they dominate they can start raising prices but these types of business are inherently low margin, competitors will see their profits as an opportunity.
- capkutay 7y agoYeah as an investor I still really like Apple. They have a TON of cash, billions of highly qualified users that they can easily roll new products/services to (iphone owners), and all the while they're frugal and meticulous about how they use it. I think the stock will pop once news breaks of another breakthrough product...whether its a car or something else.
- mhermher 7y agoBecause they're dependent on selling hardware, not software. It's not rocket science, hardware doesn't scale as easily as software, so it leads to a smaller multiplier.
- capkutay 7y agoAnd amazon has 125,000 employees running their supply chain. I wouldn't call that 'easy to scale' either.
- outside1234 7y agoAnd amazon barely makes any profit, so its not clear that their business actually does scale, if they didn’t have AWS.
- ekianjo 7y agoAmazon is not just moving goods, they have AWS as well and that scales very well.
- deleted 7y ago[deleted]
- KptMarchewa 7y agoNot more? Wikipedia claims Amazon has 647,500 employees.
- sjaknanxnnx 7y agoAAPL seems to have hit its peak in the device market, and can only grow revenues at this point by effectively raising prices on existing customers (that’s what the services category amounts to). This strategy can only take them so far.
- lunchables 7y agoOr continue to invent new products (iPod, iPhone, iPad, Apple TV, Watch, Airpods ...) then iterate on those products over years and years. Also while simultaneously driving their services revenue, which continues to be a growth area for them.
- sjaknanxnnx 7y agoThese other devices are all cheaper and less popular than the iPhone. This quarter the category that includes the AirPods and Watch made one fifth what the iPhone did. To contribute 10% of company revenue growth, this category needs to double. Maybe the category has room to double once, but will it 10x over the next five years? You would need performance like that to justify a high PE ratio.
- lunchables 7y agoYou said this: >AAPL seems to have hit its peak in the device market, and can only grow revenues at this point by effectively raising prices on existing customers (that’s what the services category amounts to). This strategy can only take them so far. Which is inaccurate. They have continued to add new products, like the Watch and AirPods. So when do you think they hit "peak device" ? You mean peak iPhone? No argument from me, they might have. But there are ways to grow revenue without just increasing prices, as those other products have demonstrated. They have also proven that the can grow revenue with their services, which is now a bigger revenue generator than iPhone.
- ajross 7y agoStock values aren't only about earnings. Amazon continues to be a growth bet, and their low earnings are because their income has historically been reinvested productively to access new markets. A quick google shows their 2018 revenue was up 31% over 2017, which was up 31% over 2016, which was up 27% over 2015. You don't buy Amazon for a share of the amount they're making today, you buy them for a share of the much bigger company they'll be tomorrow. Apple, on the other hand, sells boutique products into a rapidly commoditizing market, and is having a terrible time with growth right now (the numbers today show less than 1% revenue growth). So profit is the only reason to buy AAPL right now. And the profits? Down almost 13%.
- david-cako 7y agoIt’s a commoditized market and Apple’s success blueprint is out for everyone to see, yet no one else can adapt mid century design principles and “high fashion” style marketing to technology. This sounds like shilling (and I do own Apple stock) but I’m serious. Compare the Apple remote (with the iOS “emulator”), Apple TV, and Airplay to Chromecast’s UX, for instance. Apple does have special sauce. They make tools that work together and are understood at a surface level. Everything, including the new keyboards, fits a hardware market driven agenda (quiet, “appy”, small like a phone). Google and Amazon work backwards from services, and Samsung and co just aren’t even playing the same ballgame. They are much more like traditional prebuilt computer companies. MS is kind of coming close with just computers but they are not nearly as sticky as an everything tech company.
- october_sky 7y agoApple TV (and accompanying remote) is by far one of the worst UI/UX experiences I've seen.
- skygazer 7y agoI hear that constantly, but it's my favorite remote. I did, however, buy a sub 10 dollar silicone case for it, with a strap. It's easy to grip, comfortable, doesn't slide, and it is always obvious which way is up/forward both visually and tactilely. I think the shortcomings are well addressed with such a simple fix. But, I also use a case on my phone to fix it's same shortcomings, so perhaps that's why it doesn't feel like such a leap to me. On the other hand, it might just be that I can get used to anything. (Err, I also think the Apple TV UI is fine, too. But, perhaps I lack the imagination to envision a better UI.)
- vageli 7y ago> AAPL is still undervalued compared to stocks like AMZN. Apple's P/E of 17 is amazing compared to Amazons 78. I'm not really sure why their stock isn't traded with the same enthusiasm that other tech companies see. I'm not so sure it's useful to compare stock valuations in this way. An assessment of "undervalued" should be based solely on the facts of that specific company, IMO.
- tonyedgecombe 7y agoTo an extent although the difference is so wide you have to wonder if it is justified and if it isn't what side is wrong.
- jonknee 7y agoApple has run out of people to sell iPhones to, Amazon is just getting started ("day one" as Bezos likes to say). P/E is about growth potential and the market is saying Amazon has lots more of it than Apple.
- iamgopal 7y agoAAPL's capacity for sustainance is doubtful, when they are giving money back to investors. What is the growth path for them ? They will continue to milk successful product but no "next" strategy in sight.
- Aloha 7y agoThere was no iPhone until there was, no iPad until there was - I don't see the big deal here.
- username90 7y agoThat was when Steve Jobs was still there, and he isn't coming back.
- kaokien 7y agoNo apple watch or AirPods, till there was, and guess what Steve Jobs isn't there. Wearables increased by 50% yoy. There are many different areas that Apple will move into, AR, automation, home, still plenty of room for growth
- Aloha 7y agoSteve Jobs was not magic, nor is he the only person with vision in the world. Expecting one company to continue to make paradigm breaking technologies every other year isn't realistic.
- jhall1468 7y agoComparing a high-cost consumer electronics company with market dominance but little growth projection to an online retailer with enormous growth makes absolutely no sense. Comparing their P/E makes even less sense.
- scarface74 7y agoEnormous revenue growth with tiny profit margins....
- tonyedgecombe 7y agoEven when they were smaller and there was a long period of growth ahead of them their P/E ratio was low.
- cryptozeus 7y agoGone are the days of the PE and profits my friend.