Apple Inc. (AAPL): what the price requires
At today's price, Apple Inc. (AAPL) is priced for +32.1% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Source: https://boothcheck.com/report/AAPL
Headline
| Field | Value |
|---|---|
| Ticker | AAPL |
| Company | Apple Inc. |
| Sector / Industry | Technology |
| Current price | $317.30/sh |
| Composition | iPhone 50% / Mac 8% / iPad 7% / Wearables, Home and Accessories 9% / Services 26% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 33.2% |
| Operating margin today | 32.5% |
| Margin expansion implied | +0.7pp |
| Implied growth | 32.1% |
| Multiple paid | 32x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.2pp.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.30σ |
| cohort percentile (of 177 peers) | 59 |
| sustained it ~5 years at this level | 27% |
| implied end-window share | 5% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.80x | 4 | expensive |
| Earnings | 3.46x | 5 | expensive |
| Relative | 1.27x | 5 | expensive |
| Growth | 0.85x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $313.89 | 1.01x | yes | FCF base $149.4B, growth 12% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $449.47 | 0.71x | yes | Exit EV/EBITDA: 29.3x / 31.3x / 33.3x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $249.14 | 1.27x | yes | P/E 28x (static sector reference · 2026-04), scenarios: 23.1x / 28.0x / 32.9x (bear / base = reference held flat / bull), EV/EBITDA 23.4x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $89.99 | 3.53x | yes | BV/sh $7.23, ROE (TTM) 115.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $797.60 | 0.40x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $375.25 | 0.85x | yes | Rev $451.4B, growth 12% (input: historical growth; tapered), Terminal P/S: 8.5x / 10.4x / 12.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $289.10 | 1.10x | yes | EPS $8.26, growth 35% (input: historical EPS growth), PEG=1.09 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $93.11 | 3.41x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $124.93B × (1−17%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $152.78 | 2.08x | yes | BV $7.23 + 5yr PV of (ROE (TTM) 115.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $36.66 | 8.66x | yes | √(22.5 × EPS $8.26 × BVPS $7.23) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $201.43 | 1.58x | yes | EBITDA $150.58B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $91.75 | 3.46x | yes | FCF $129174.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $81.85 | 3.88x | yes | SBC-adj FCF $115.70B (FCF $129.17B − SBC $13.47B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $266.52 | 1.19x | yes | EPS $8.26 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $15.41 | 20.59x | yes | BV $7.23 × (ROIC 19.5% / WACC 9.2%) (excluded from median) |
| P/Sales Sector | Relative | $183.94 | 1.72x | yes | Revenue $451.44B × sector P/S 6.0x |
| PEG Fair Value | Relative | $309.75 | 1.02x | yes | EPS $8.26 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $89.30 | 3.55x | yes | EPS $8.26 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $17.4b |
| Net debt / NOPAT (after-tax) | 0.15x |
| Net debt / operating income (pre-tax) | 0.12x |
| Share count CAGR (buyback) | -2.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Apple's growth engine is no longer the phone: Services grew 14% to $109.2B in FY2025 per the 10-K, driven by advertising, the App Store, and cloud services, while iPhone grew 4% to $209.6B and Wearables shrank, so the margin-rich subscription layer is doing the compounding.
- The biggest specific risk is that today's price asks for about 32.6% annual operating-income growth over the next five years from a company that just grew total sales 6%, a pace only about 27% of comparable fast-growers have sustained that long.
- Watch July 30, 2026: the fiscal third-quarter report is Tim Cook's final earnings call as CEO before John Ternus takes over, with consensus at $1.88 of quarterly diluted EPS, up 19.8% year over year.
Bull Case
The scoreboard says the market expects a lot: the price sits at roughly 32 times company-wide operating income, above what peer multiples support by about 27%, and only the forward-growth methods land above it. The bull case is that the spread is earned, and its evidence is the quiet revenue-mix shift. Services reached $109.2B in FY2025, growing 14% while total net sales grew 6% to $416.2B, and the 10-K attributes the growth "primarily to higher net sales from advertising, the App Store" and cloud services. That line carries software margins on an installed base of devices no competitor can address, and at 26% of revenue it is now large enough to move the whole company's economics: trailing operating income stands at $147.4B on a 32.6% operating margin.
The hardware franchise, meanwhile, is showing signs of a genuine upgrade cycle rather than a maintenance one. The Q1 FY2026 filing notes iPhone growth "due primarily to higher net sales of Pro models", the richer end of the lineup, and the fall cycle brings the first foldable iPhone, with production plans reportedly raised to around 10 million units. Analysts expect the September quarter's momentum to show up early: consensus for the July 30 print has revenue growing 14% to 17% year over year, which would be the fastest pace in years. An AI-capable installed base plus a new form factor is the classic Apple play: let others prove the category, then absorb it with distribution and integration.
Capital return does the rest. The share count has fallen 2.7% a year over the past four years, among the most aggressive sustained buybacks at any scale, so per-share figures compound faster than the business itself. The company runs $85.9B of gross debt against a slight net-debt position, trivial next to $147.4B of trailing operating income. Every year the bet gets easier to defend on per-share arithmetic: fewer shares, a stickier Services annuity, and a hardware base that shows up every two to four years to buy the next device.
Bear Case
Name the competitors first, because the moat is being probed from three directions at once. In devices, the 10-K concedes that "Some of the Company's competitors have broad product lines, low-priced products, large installed bases of active devices, and large customer bases", and the AI feature race has so far been led from outside Cupertino, with Siri's overhaul still a work in progress while rivals ship assistant upgrades on faster cycles. In distribution, the App Store's take rate, the single richest vein inside Services, is the explicit target of regulators and litigants on two continents; the 10-K acknowledges exposure "to increasing regulation, government investigations, legal actions and penalties". And in silicon-adjacent services, advertising and cloud, Apple competes with platforms whose core business is exactly that, not a sideline.
Then look at what the price requires. At about 32 times company-wide operating income, the embedded assumption is operating-income growth of roughly 32.6% a year for five years, from a company whose revenue grew 6% last year and whose operating margin already sits at 32.6%. The near-term pace is not the problem; the persistence is. Only about 27% of comparable fast-growers sustained such a pace for even five years, and Apple has to do it from a $4.64T market cap. The static methods say what they always say about this shape, asset value at roughly a third of the price and earnings power at less, but here even the peer-multiple lens reads the price 27% rich, which for a mature hardware-led business is the read that usually matters.
The product-cycle bet cuts both ways. The foldable is a genuine catalyst, but it is also priced as one before a single unit has shipped, and hardware transitions have execution risk in exactly the components where Apple depends on single-source suppliers. Wearables already shrank 4% in FY2025, evidence that not every category extension compounds. Meanwhile the balance sheet, uniquely among the megacaps, is in a modest net-debt position of $17.4B; the buyback that flatters per-share growth spends cash the business must keep generating at peak margins to sustain. If the September-cycle demand disappoints or the App Store economics get restructured by court order, the multiple has to travel a long way down before any valuation family catches it.
Valuation
Start with what today's price asks for. At $315.32 (July 10, 2026), the market pays about 32 times company-wide operating income, which inverts to roughly 32.6% annual operating-profit growth over the next five years at a 10% cost of capital, fading to 4% terminal growth after. The company's recent delivery, 6% revenue growth and a 32.6% operating margin in FY2025, makes the rate itself familiar; the stretch is the duration, and history clears it about 27% of the time for comparable companies. That is an elevated bet, not an outlandish one, and it is concentrated in whether Services and a hardware supercycle can both fire for several consecutive years.
The method families divide on cue. Forward-growth approaches land about 15% above the price, the only family that does; peer multiples read the price 27% rich; asset-value and earnings-power methods land at a third of the price or less, their usual verdict on a business whose worth is franchise durability rather than book value. The pattern is a moat-durability premium: nothing in the price is defensible on current-year economics alone, and everything depends on the compounding continuing.
The composition explains why the market keeps granting it. iPhone is half the revenue mix at $209.6B, growing 4%, but Services at $109.2B and 14% growth per the 10-K is the line doing the heavy lifting, and it carries the margins of a software business. Mac grew 12% to $33.7B, iPad 5% to $28.0B, and Wearables declined 4% to $35.7B, so the hardware periphery is a wash and the story is two lines: the phone holds the base, Services compounds on top of it. The balance sheet is a modest net-debt position, $17.4B, unusual for this cohort but immaterial against $147.4B of trailing operating income, and the share count falls 2.7% a year, which quietly converts corporate growth into faster per-share growth. What has to be true at this price: the foldable cycle lands, Services holds double-digit growth against regulatory pressure on the App Store, and the pair sustains long enough to satisfy a five-year growth path only a quarter of comparable companies have delivered.
Catalysts
July 30, 2026 carries unusual weight for a routine fiscal-third-quarter print. It is Tim Cook's final earnings call as chief executive, with hardware chief John Ternus announced as his successor from next quarter, so guidance language will be read as the incoming CEO's opening posture. Consensus expects $1.88 of diluted EPS, up 19.8% from $1.57 a year earlier, on revenue growth of 14% to 17% year over year toward roughly $110B for the quarter.
The fall product cycle is the second act. Apple reportedly plans at least five new iPhone models including its first foldable, with production targets raised to about 10 million foldable units, and Morgan Stanley has argued fiscal 2027 iPhone shipments could exceed 250 million if the foldable and AI features drive an upgrade wave. Against that optimism runs the regulatory calendar: App Store business-model changes in response to litigation and the EU's Digital Markets Act continue to roll out region by region, and each concession trims the take-rate economics inside the Services line the bull case leans on.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- DELL (Dell Technologies Inc.)
- (no filing in the citation store)
- HPQ (HP INC.)
- (no filing in the citation store)
- IBM (INTERNATIONAL BUSINESS MACHINES CORP)
- (no filing in the citation store)
- HPE (HEWLETT PACKARD ENTERPRISE COMPANY)
- (no filing in the citation store)
- CSCO (CISCO SYSTEMS, INC.)
- (no filing in the citation store)
- SMCI (SUPER MICRO COMPUTER, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
AppleInsider, July 2, 2026 · BigGo Finance / supply-chain coverage, July 2026 · AppleInsider and MacDailyNews, July 2026 · BigGo Finance, July 2026