Apple’s Stock May Not Be as Cheap as It Looks: Jonathan Weil
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Feb. 17 (Bloomberg) -- Throughout the extraordinary surgein Apple Inc.’s share price, a persistent question has lingered:Why is the stock still so cheap? One overlooked answer may bethat Apple’s accounting isn’t as conservative as it used to be.
After topping $500 a share this week, the iPhone and iPadmaker now has a $468 billion market capitalization. Yet Appletrades for only 14.3 times its earnings for the previous fourquarters -- about the same as the Standard & Poor’s 500 Index’sprice-earnings ratio -- in spite of growth that’s far aboveaverage. Revenue last quarter rose 73 percent to $46.3 billion,while earnings more than doubled to $13.1 billion.