As you can see above, the price has run away from the earnings. Oddly enough, back in Q1 of 2019 we saw the opposite, EPS ran away from the share price. It’s like Apple stock is lagging it’s earnings a couple of quarters. Q1 it was undervalued and now overvalued on an earnings perspective.
4.14% EPS growth quarter to quarter, 10.55% yoy EPS growth. Quickly-you are overpaying for what you are getting here. You are paying too much for too little growth and you are also not getting that great of a dividend either. I think apple is a little overvalued, not incredibly but a little. Maybe $310 would be a better entry price.
I realize regardless of this assessment Apple had an incredible run last year, no denying that. However, does this continue for buy and hold investors in Q1? I don’t think so.
Prediction-The Apple falls from here. If they don’t have a perfect report this is not going to end well.
The EPS has been greater than the price in each of the past Q1 reports. The only way this works out is if the EPS is a grand slam, otherwise, my prediction is, it falls next week.
This is of course not to discourage anyone from buying Apple long-term, I just think better prices are on their way.
We shall see, maybe I’m wrong, maybe I’m right. I don’t own APPL either way but I do enjoy looking at disconnects between share price and growth and in this case, it’s clear there is one.
My best guess is around the $315 mark is where we end up soon. I personally fear we are seeing a bit of FOMO on the Apple Stock here. Lots of people are now going after Apple because they sense it’s too good to fall.
I’ll report back.