Apple Inc | NASDAQ: AAPL

DIY Opinion


Company Overview

Below is an example Simplified Company Analysis and Company Valuation Model for Apple.

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Chart Sources: Annual 10-K's and Quarterly 10-Q's

The key takeaways from the below charts are as follows:

  1. The iPhone accounts for over half of Apple's total sales revenue
  2. The majority of Apple's sales are generated in the Americas segment
  3. The Americas segment is Apple's most profitable

If you choose to invest in Apple, pay close attention to Apple's iPhone sales in the Americas segment.

Services includes revenue from Internet Services, AppleCare ®, Apple Pay, licensing and other services
Other Products includes sales of Apple TV, Apple Watch, Beats ® products, iPod and Apple-branded and third-party accessories

Source: Annual 10-K

Apple designs, manufactures and markets mobile communication and media devices, personal computers and portable digital music players, and sells a variety of related software, services, accessories, networking solutions and third-party digital content and applications.  The Company’s products and services include iPhone ® , iPad ® , Mac ® , iPod ® , Apple Watch ® , Apple TV ® , iCloud ®, Apple Pay ®, Beats ® products and Apple-branded accessories.  Apple manages its business primarily on a geographic basis with it's reportable operating segments consisting of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific.

Valuation models can become quite lengthy and complex.  However, at the end of the day the value of a company boils down to two simple questions:

  1. Is the company making more money (growing sales revenue)?
  2. Is the company efficiently making more money (do they have a high operating margin)?

The model allows you to see how changing a few basic assumptions (green cells) impacts the valuation of the company.