AAPL Stock Study (2-15-26)

Posted by Mark on July 28, 2025 at 07:21 | Last modified: February 17, 2026 09:07

I recently did a stock study on Apple Inc. (AAPL, $255.78).

M* writes:

     > Apple is among the largest companies in the world, with a broad portfolio
     > of hardware and software products targeted at consumers and businesses.
     > Apple’s iPhone makes up a majority of the firm sales, and Apple’s other
     > products like Mac, iPad, and Watch are designed around the iPhone as the
     > focal point of an expansive software ecosystem. Apple has progressively
     > worked to add new applications, like streaming video, subscription
     > bundles, and augmented reality. The firm designs its own software and
     > semiconductors while working with subcontractors like Foxconn and
     > TSMC to build its products and chips. Slightly less than half of Apple’s
     > sales come directly through its flagship stores, with a majority of
     > sales coming indirectly through partnerships and distribution.

Over the past decade, this mega-size (> $100B annual revenue) company has grown sales and EPS at annualized rates of 8.2% and 16.1%, respectively [FY ends Sep 30]. Lines are mostly up, straight, and parallel except for sales dips in ’19 and ’23 and EPS dips in ’19 and ’24. Shares outstanding decrease 31.8% (4.2% per year). Five-year EPS R^2 is 0.72 and Value Line (VL) gives an Earnings Predictability score of 85.

Over the past decade, PTPM trails peer/industry [lines have identical morphology and practically overlay each other for all three metrics] averages while ranging from 24.4% in ’20 to 31.9% in ’25 with last-5-year mean of 30.7%. ROE also trails peer/industry averages despite increasing from 35.0% to 167% (’25) with last-5-year mean of 155% (far above industry standards due to aggressive share buyback program per GoogleAI). Debt-to-Capital is less than peer/industry averages despite increasing from 40.4% to 57.2% (’25) with last-5-year mean of 65.9%.

Quick Ratio is 0.85 and Interest Coverage N/A per M* who assigns “Wide” Economic Moat, gives an A grade for Financial Health (per BetterInvesting® website), and rates the company “Exemplary” for Capital Allocation [I’m surprised M* is complimentary of share buyback program because doing so over a long time horizon while having VL Price Growth Persistence score of 100 implies costly expense for much of it: something M* detests]. VL rates the company A+ for Financial Strength.

With Interest Coverage unspecified, Cash Coverage Ratio may be calculated as an alternative metric. For 2025, GoogleAI has (CF from Operations) / Total Debt = $111.48B / $98.65B = 1.13: company generates more cash in one year to theoretically pay down its entire debt load.

AAPL is #2 on the “Top 40 Stocks Purchased by Investment Clubs” stock screen as of 2/10/26 (nod to the BetterInvesting® Weekly Update email for alerting me).

With regard to sales growth:

• YF gives YOY ACE 13.8% and 9.5% [both percentages equal to below] for ’26 and ’27 (based on 37 analysts).
• Zacks gives YOY ACE 10.8% and 7.3% for ’26 and ’27, respectively (11 analysts).
• VL projects 6.3% annualized growth from ’25-’29.
• CFRA projects 11.6% YOY and 9.6% per year for ’26 and ’25-’27, respectively.
• M* offers a 2-year ACE of 8.3%. and projects 7.7% per year from ’25-’30 (Equity Report).

I am forecasting below the range at 6.0% per year.

With regard to EPS growth:

• MarketWatch projects 12.1% and 10.3% per year for ’25-’27 and ’25-’28, respectively (based on 51 analysts).
• Nasdaq.com gives ACE 2.6% and 13.8%/year for ’26-’28 and ’26-’29 [14 / 5 / 1 analyst(s) for ’26 / ’28 / ’29].
• Seeking Alpha projects 4-year annualized growth of 10.6%.
• Finviz gives ACE 5-year annualized growth of 11.2% (20).
• LSEG estimates LTG at 12.5%.
• Argus projects 5-year annualized growth of 13.0%.
• YF gives YOY ACE 13.8% and 9.5% for ’26 and ’27, respectively (38) [something likely amiss as both equal to above].
• Zacks gives YOY ACE 12.7% and 10.5% for ’26 and ’27 (13) along with 5-year annualized growth of 13.3%.
• VL projects 11.4% annualized growth from ’25-’29.
• CFRA projects growth of 14.6% YOY and 12.0% per year for ’26 and ’25-’27 along with 3-year CAGR of 10.0%.
• M* gives long-term growth ACE of 13.1% and projects 13.1% [puzzling duplication] from ’25-’30 in Equity Report.

My 10.0% forecast is below the long-term-estimate range (mean of eight: 12.3%). Initial value is ’25 EPS of $7.46/share instead of 2026 Q1 EPS $7.91 (TTM).

My Forecast High P/E is 27.0. Over the past 10 years, high P/E increases from 14.9 to 34.9 (’25) with last-5-year mean of 32.8 and a last-5-year-mean average P/E of 27.4. I am below the latter (and high P/E for each of last six years).

My Forecast Low P/E is 16.0. Over the past 10 years, low P/E increases from 10.8 to 22.7 (’25) with last-5-year mean of 22.0. I am forecasting below the last six years.

My Low Stock Price Forecast (LSPF) is $169.20. Default ($126.60) based on initial value above is unreasonably low at 50.5% less than the previous close and 25.2% less than the 52-week low. My (arbitrary) selection is the 52-week low itself: 33.8% less than the previous close.

Over the past 10 years, Payout Ratio (PR) has fallen from 26.2% to 13.7% (’25) with a last-5-year mean of 15.0%. I am forecasting below the range at 13.0%.

These inputs land AAPL in the HOLD zone with a U/D ratio of 0.8. Total Annualized Return (TAR) is 5.3%.

PAR (using Forecast Average—not High—P/E) of 0.8% is unthinkable as an investment candidate. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on the 5.3% TAR albeit still lower than I seek for a mega-size company.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 485 studies done in the past 90 days (159 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 7.4%, 10.0%, 32.4, 21.9, and 15.0% respectively. I am equal on EPS growth and lower on the rest. VL [M*] projects a future average annual P/E of 31.0 [20.6] that is greater than MS (27.2) and greater [less] than mine (21.5).

MS high / low EPS are $12.28 / $7.30 versus my $12.01 / $7.46 (per share). VL [M*] high EPS of $11.50 [$12.39] is less [greater] than both.

MS LSPF of $169.20 implies a Forecast Low P/E of 23.2 versus the above-stated 21.9. MS LSPF is 5.8% greater than the default $7.30/share * 21.9 = $159.87 that results in more aggressive zoning. MS LSPF is equal to mine.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also backing this assessment is MS TAR exceeding mine by 3.4% per year.

With regard to valuation, PEG is 2.3 and 2.9 per Zacks and my projected P/E: slightly overvalued (2.0 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is elevated at 1.18. “Quick and Dirty DCF” has stock undervalued by 11%.

Per U/D, AAPL is a BUY under $208/share. BetterInvesting® TAR criterion would be met [324.3 / ((14.37 / 100 ) +1 ) ^ 5]
~ $165 given a forecast high price ~$324.

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