Apk Pure: Why Apple is the most overpriced tech stock that exists | News
Apk Pure: Why Apple is the most overpriced tech stock that exists | News
and dan i gotta start with apple our pro subscribers heard it yesterday your reasoning but tell it to our broader audience you actually call apple quote the most overpriced tech stock that exists tell us why yeah i mean in terms of big cap tech it clearly is in my mind because if you look at it in terms of how much they're growing relative to the multiple it just doesn't make any sense right relative to the other mega caps so apple's revenues compounded over the last five years including this calendar year because we only have a quarter left has grown about 11 microsoft is going about 15 over this time google's at 23. netflix is at 27. amazon's at 28 and facebook given all the discussion about the metaverse they've grown revenues compounded at 34 but you can buy both facebook and google at a lower multiple than apple and don't forget apple's a massive pandemic beneficiary and so for them their iphone revenues over the last five years fiscal 15 to fiscal 20 were down 11 over five years before you had this pandemic benefit ipad max sales were also down year over year before the pandemic hit so you know for me it's we like facebook a lot we like google a lot they're growing two to three times faster and you can buy them at a lower multiple but with faster growth rates in the future and we haven't even gotten into the risks around privacy and what that does to their app store take rates right dan then how much weight do you put into the services piece of the apple story i know still a relatively small portion of revenue but if you think that during the pandemic they were a beneficiary and they were able to grow that installed user base could that not provide greater than expected growth well don't forget i mean that's the whole reason the multiple's gone up so much despite the growth that they've shown so if you're looking forward in time i think it's pretty clear that all these companies are trying to get the take rates down um they have that ruling against them with epic and you've got pressure across the globe not just from europe but also in the us in terms of what they're charging that 30 percent rate up front if those numbers start to come down this multiple is going to have a big problem because their core hardware business is you know flat to declining and that's just because of you know 4 billion people on the planet have smartphones so that's the big risk and that's only going one direction it's going lower it's not going to go higher with those take rates dan i'm curious about your thoughts on this clash that we've been talking about between apple and facebook first whether or not you think that apple's operating system changes are going to continue to challenge facebook and others through next year and also whether you think apple's really going to be investing heavily in the metaverse space that facebook has staked such a claim in now yeah i mean i you have to sort of step back the good news is that a lot of these companies have gone through and reset their targets so for facebook for example you're now looking at three percent eps growth as the forecast for next year i'd be shocked if the number wasn't a lot better than that um because facebook when they report their september quarter they always guide out and then they lay out what their expenses are i don't think they've ever come in at the mid to high end of expenses they've always come in sort of mid or even below the expense guide they've given despite the fact that the revenues typically come in higher so i think you know from that perspective facebook is clearly one you want to look at for talking about the metaverse and all those great things but you're right from apple's point of view they're going to have to think about that if that's the next step they're going to have to think about how to invest in that space and and that's going to be expensive for them if that's the path that they're going to go down and I think that's kind of where every company is headed
0 Comments