As outstanding stock is bought and sold in public markets, capitalization could be used as a proxy for the public opinion of a company’s net worth and is a determining factor in some forms of stock valuation.
Sales jumped 73% and earnings more than doubled during its quarter ended Dec.
It sells for just under 15 times the company’s earnings over the past four quarters, according to Thomson Reuters data.
The companies that make up the Dow are trading at about 13.9 times their past year’s earnings per share, a popular measure of how expensive stocks are.
The stock makes up nearly 4% of the S&P 500 index, which weights companies by size.
“Apple is priced like a slow grower because investors aren’t used to dealing with a company this big that’s growing this fast,” says Daniel Ernst, an analyst at Hudson Square Research in New York.
Mr Ernst, whose price targets on the stock have long been among Wall Street’s highest, says Apple should be worth $700 a share today.
But Apple shareholders have gotten used to fast gratification: The share price has doubled five times in the past decade.
A doubling of the stock price from Friday’s $522.41 would put Apple’s market value at over $900 billion.
The stock market is perhaps the only place where shoppers rush in when prices go up.
Microsoft (MSFT) reached a value of around $600 billion in late 1999, which is more than $800 billion in today’s dollars.
It was helped by a tech stock boom, but Apple today produces more than triple the profit that Microsoft did back then, not adjusted for inflation.
Gaining Market ShareAnother important difference: Microsoft in late 1999 controlled more than 90% of the market for personal computer operating systems, according to some estimates.
Apple controlled 26.6% of the mobile computing market in the fourth quarter of 2011, including notebooks and tablets, according to NPD DisplaySearch, which provides research for the display industry.
Cook, the Apple chief executive, told a Goldman Sachs investment conference this month that Apple would not rest on its laurels after its record fourth quarter, in which it sold 37 million iPhones — 17 million more than it had ever sold in a quarter.
Its smartphone market share was 23.9% in the fourth quarter, according to Strategy Analytics, a technology consultant.
Market share is closely monitored for signs of change in the competitive landscape, and it frequently drives strategic or tactical action.
“Apple has plenty of room to gain market share in the US, and even more in emerging markets like China,” says Michael Walkley, who covers Apple for Toronto investment bank Canaccord Genuity.
Both analysts cite Apple’s record of creating large new markets (iPods, smartphones, tablet computers) and its cash and investments of nearly $100 billion.
BARCELONA, Spain — When Ellie Turner decided she wanted an upgrade from her iPhone 3G, she expected to pay more for Apple’s new iPhone 4S than for the other leading smartphones on the market.
Both also think a dividend payment could attract a new crowd of buyers to shares, especially among income seeking mutual funds.
Apple pays no dividend and hasn’t announced plans to start, but Chief Executive Tim Cook told shareholders Thursday the cash is “more than we need to run the company” and that management is thinking “very deeply” about what to do with it.
Colin Gillis at BGC Partners in New York, who calls the stock a “hold,” says that for Apple to impress investors from here it must “smash earnings forecasts to pieces, and that’s a difficult position.”.
Nicole Hansch is a business journalist based in Sydney, Australia. Nicole has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Nicole spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
