Apple’s Valuation Discrepancy

The two charts below are from Fortune and they highlight a valuation discrepancy in the tech world.

First is the P/E Ratio of a few of the most recognized and popular names in the tech world.

Chart courtesy of Fortune. Click image to enlarge.
Chart courtesy of Fortune. Click image to enlarge.

It gets even weirder when you look at the free cash flow generated by the same companies.

Chart courtesy of Fortune. Click image to enlarge.
Chart courtesy of Fortune. Click image to enlarge.

Apple also trades at an EV/EBITDA multiple of 7. If you were to buy 100% of Apple today you would get your money back within 7 years. I don’t know about you but if I could buy 100% of a high-quality, industry leading, high free cash flow producing business and earn back my purchasing price in 7 years I’d be all over it. Lucky for us we don’t need to come up with $584 billion to buy all of Apple, we just need around $100 to buy a piece.

Source:

Apple’s Bizarre Valuation: Something’s Got to Give (Fortune)