As of May 22, 2025, Apple Inc's estimated intrinsic value ranges from $71.86 to $198.07 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $198.07 | -2.0% |
| Discounted Cash Flow (5Y) | $176.39 | -12.7% |
| Dividend Discount Model (Multi-Stage) | $141.11 | -30.2% |
| Dividend Discount Model (Stable) | $124.79 | -38.2% |
| Earnings Power Value | $71.86 | -64.4% |
Is Apple Inc (AAPL) undervalued or overvalued?
With the current market price at $202.09, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Apple Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.92 | 0.99 |
| Cost of equity | 8.1% | 10.4% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 14.6% | 15.1% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 8.0% | 10.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $176 | $2,719,809M | 80.3% |
| 10-Year Growth | $198 | $3,045,493M | 63.7% |
| 5-Year EBITDA | $108 | $1,685,830M | 68.1% |
| 10-Year EBITDA | $136 | $2,108,387M | 47.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $102,854M |
| Discount Rate (WACC) | 10.2% - 8.0% |
| Enterprise Value | $1,008,622M - $1,290,503M |
| Net Debt | $70,024M |
| Equity Value | $938,598M - $1,220,479M |
| Outstanding Shares | 15,022M |
| Fair Value | $62 - $81 |
| Selected Fair Value | $71.86 |
| Metric | Value |
|---|---|
| Market Capitalization | $3035816M |
| Enterprise Value | $3105840M |
| Trailing P/E | 31.20 |
| Forward P/E | 25.43 |
| Trailing EV/EBITDA | 8.50 |
| Current Dividend Yield | 48.25% |
| Dividend Growth Rate (5Y) | 1.99% |
| Debt-to-Equity Ratio | 0.03 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $59.42 |
| Discounted Cash Flow (5Y) | 25% | $44.10 |
| Dividend Discount Model (Multi-Stage) | 20% | $28.22 |
| Dividend Discount Model (Stable) | 15% | $18.72 |
| Earnings Power Value | 10% | $7.19 |
| Weighted Average | 100% | $157.65 |
Based on our comprehensive valuation analysis, Apple Inc's weighted average intrinsic value is $157.65, which is approximately 22.0% below the current market price of $202.09.
Key investment considerations:
Given these factors, we believe Apple Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.