Monday, April 20, 2015

Fiscal 2Q 2015 Final Estimates

As of today's market open of $125.57, AAPL now trades at a 12.7x multiple on my next-twelve-months EPS estimate (10.0x excluding cash and next-12m div).

Refined my Apple Watch estimates but it still involves significant uncertainty. Guessing 21.75m units for the next 12 months at an ASP of $575 driving revenue of $12.5b for its first year, not including $1b from additional bands, accessories and Apple Care. Should roughly double in second year.

Expecting a dividend raise to 53 cents (+13% from 47¢) quarterly, and extension of the share repurchase program to a total $140-150b by end of calendar 2016 (currently at $90b by end of 2015).

Detailed estimates:

3mo ending Mar-2015  Rev($M)  GM(%)  EPS($)
-------------------  -------  -----  ------
Analysts consensus    55,760          2.14
Apple guide low       52,000   38.5   1.88*
Apple guide high      55,000   39.5   2.11*
Deagol estimates      56,155   40.3   2.22 (5.83b shares)

Monday, January 19, 2015

Fiscal 1Q 2015 Final Estimates

As of Friday's close of $105.99, AAPL is trading at a 12.5x multiple on my next-twelve-months EPS estimate (9.5x ex-cash).

I expect very strong results for Q1 with record-breaking net income of $15.7b, but guidance for Q2 may come in light (even at the top end) relative to expectations. Hope I'm wrong on that.

I'm estimating last quarter's revenue growth in the high teens (setting the tone for the whole 2015 Fiscal Year) as well as strong +39% gross margins, majorly driven by a high proportion of the iPhone user base upgrading to 6 and 6 Plus with unit sell-through growth estimated at 29/24/17% for Q1/Q2/FY15 (compared to 11/27/16% for Q3/Q4/FY14) and FY15 ASPs holding steady or slightly increasing despite FX headwinds early in the fiscal year.

I've finally (and very tentatively) modeled something for Apple Watch: as a base case (for now) I consider it a solid accessory for the iPhone and then strongly discount it by 25-35% (due to final product uncertainty and other unknowns such as pricing potential) which results in about 15% of compatible iPhone penetration (75m of 500m iPhone-5-and-higher user base after first 3 years).

Those saying Watch doesn't move the needle must not be looking beyond FY2015 at all, as in fact I model only 6.5m units for this fiscal year with shipments starting in the end of March contributing 1m units in the current quarter. Yet, my conservative base case already represents about 25% of the company-wide revenue growth in '16 and '17, getting to a modest $20b by then (somewhat slower than iPad which had the steepest revenue uptake of any Apple product, but this excludes additional wristbands and other Watch accessories which I model separately and even more tentatively). Again, it could easily be 2x that, considering the fast adoption of compatible iPhones and the customer base's high acquisition power.

Saturday, October 18, 2014

Fiscal 4Q 2014 Final Estimates

As of Friday's close of $97.67, AAPL is trading at a 12.5x multiple on my next-twelve-months EPS estimate (9.6x ex-cash). A strong iPhone launch is providing some upside to my numbers, while iPad/Mac growth trajectory remains flat/moderate as expected (with Mac slightly better than iPad). We'll see in January if the new iPads can boost things a bit. Again, not modeling anything on Apple Watch at least until I have some more visibility, particularly on pricing.

Detailed estimates:

3mo ending Sep-2014   Rev($M)   EPS($)   GM(%)
-------------------   -------   ------   -----
Analysts consensus     39,850     1.31
Apple guide low        37,000     1.12*  37.0
Apple guide high       40,000     1.32*  38.0
Deagol estimates       40,800     1.38   38.5 (5.99b shares)

3mo ending Dec-2014   Rev($M)   EPS($)   GM(%)
-------------------   -------   ------   -----
Analysts consensus     63,520     2.40
Apple guide low (e)    59,000     2.18*  38.0
Apple guide high(e)    63,000     2.46*  39.0
Deagol estimates       64,344     2.55   39.4 (5.95b shares)

*EPS guidance range derived from other figures provided
 by Apple and diluted shares outstanding estimated by me.

Monday, July 14, 2014

Fiscal 3Q 2014 Final Estimates

As of Monday's close of $96.45 AAPL is trading at a 13.0x multiple on my next-twelve-months EPS estimate (9.8x ex-cash).

None of my estimates include any new product categories, but I do expect a new iPhone in late September and new iPads in November. Since I really doubt the market has decided to fully value Apple's current product lines as I project them (within my theory of 10x fwd EPS plus cash), it's clear that expectations about new categories for this year and next are somewhat baked into the current price. Keep this in mind as we get past the earnings report and rest of the year announcements.

Detailed estimates:

3mo ending Jun-2014   Rev($M)   EPS($)   GM(%)
-------------------   -------   ------   -----
Analysts consensus     37,860     1.22
Apple guide low        36,000     1.13e  37.0
Apple guide high       38,000     1.25e  38.0
Deagol estimates       38,755     1.33   38.7 (5.98b shares)

3mo ending Sep-2014   Rev($M)   EPS($)   GM(%)
-------------------   -------   ------   -----
Analysts consensus     40,650     1.34
Apple guide low (e)    38,000     1.28   37.5
Apple guide high(e)    40,000     1.41   38.5
Deagol estimates       41,763     1.51   38.7 (5.85b shares)

12m ending Sep-2015   Rev($M)   EPS($)
-------------------   -------   ------
Analysts consensus    195,060     6.93
Deagol estimates      195,224     7.58

Monday, April 14, 2014

Fiscal 2Q 2014 Final Estimates

As of Friday's close of $519.61 AAPL is trading at 10.5 times my next-twelve-months EPS estimate (7.5x ex-cash). The biggest impact to my estimates for the quarter and rest of CY14 is due to China Mobile ramp much slower than I originally modeled in January. Taking guidance quite seriously now, thus estimating a significant drawdown in iPhone/iPad channel inventory (about 4.5m units) resulting in a $2.5b revenue impact, which prevents grossly exceeding the top range of guidance for last quarter. Expect management to highlight sell-through numbers.

Detailed estimates:

3mo ending Mar-2014   Rev($M)   EPS($)   GM(%)
-------------------   -------   ------   -----
Analysts consensus     43,570    10.15
Apple guide low        42,000     9.46   37.0
Apple guide high       44,000    10.53   38.0
Deagol estimates       44,053    10.60   38.1 (884m shares)