If you are wondering whether Apple stock still offers good value at today’s price, you are not alone. A closer look at what you are paying for each future dollar of cash flow can be very revealing.
At a last close of US$255.78, Apple has seen mixed returns, with a 6.9% drop over the past week, a roughly flat 0.1% move over 30 days, and gains of 5.0%, 70.1% and 108.4% over 1, 3 and 5 years respectively. This raises fair questions about both growth potential and changing risk perceptions.
Recent attention on Apple has not only focused on its share price path but also on how investors are weighing its long term prospects against current expectations. That context matters because sentiment around product cycles, capital returns and broader tech market conditions can all influence how investors think about what counts as a fair price for the stock.
Our valuation framework scores Apple at 1 out of 6 on our undervaluation checks, and you can see that score in detail at 1 / 6 valuation score. Next, we will compare several common valuation approaches before finishing with a way to tie them together into a clearer picture of what the market might be pricing in.
Apple scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model looks at the cash Apple is expected to generate in the future and then discounts those projected cash flows back to today to estimate what the business might be worth now.
For Apple, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections. The latest twelve month free cash flow is about $124.1b. Analyst inputs and extrapolated estimates suggest projected free cash flow of around $193.0b by 2030, with interim years between 2026 and 2035 ranging from roughly $138.2b to $243.2b before discounting.
Bringing those projected cash flows back to today, the DCF model arrives at an estimated intrinsic value of about $242.41 per share. Against the recent share price of $255.78, this implies the shares are around 5.5% overvalued, which sits within a margin of error that many investors might see as relatively tight.
Result: ABOUT RIGHT
Apple is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.
For a profitable company like Apple, the P/E ratio is a useful shorthand for what investors are currently willing to pay for each dollar of earnings. It captures both what the business is earning today and what the market collectively thinks those earnings are worth.
In practice, a “normal” or “fair” P/E reflects what investors expect for future earnings growth and how much risk they see in those earnings. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher uncertainty tends to line up with a lower one.
Apple currently trades on a P/E of 31.88x. That is above the Tech industry average of 21.90x and also above the peer group average of 27.32x. Simply Wall St’s Fair Ratio for Apple is 38.14x. This Fair Ratio is a proprietary estimate of the P/E that might be reasonable given factors such as earnings growth, profit margins, industry, market cap and specific risks, rather than relying only on simple peer or sector comparisons.
Because Apple’s current P/E of 31.88x is below the Fair Ratio of 38.14x, this framework suggests the shares screen as undervalued on an earnings multiple basis.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These let you write a simple story about Apple, connect it to assumptions for fair value, revenue, earnings and margins, then see how that stacks up against today’s price.
On Simply Wall St’s Community page, a Narrative is your perspective on the company tied directly to a forecast and a fair value. Instead of just seeing that someone thinks Apple is worth US$177.34 or US$309.04, you can also see the thinking behind those numbers, such as views on AI execution, services growth, tariffs, margins and future P/E levels.
You can then compare the Fair Value from a Narrative to Apple’s current share price to help you evaluate whether it might be closer to a buying opportunity or a candidate to trim. Narratives update automatically as new earnings, news or analyst estimates are added, so your story and numbers stay in sync without extra work.
For Apple, however, we will make it really easy for you with previews of two leading Apple Narratives:
🐂 Apple Bull Case
Fair value: US$275.00
Implied discount vs last close: 7.0% below this fair value based on the narrative inputs
Revenue growth assumption: 12.78%
Frames recent share price weakness and tariff headwinds as a possible mismatch between short term pressure and the scale of Apple’s cash generation and brand strength.
Highlights Q1 2025 profits of US$36.33b and record services revenue of US$26.3b as support for the business model while Apple works on production shifts to India and Vietnam.
Assumes Apple’s AI investment and ecosystem loyalty can support long term growth, with a fair value of US$275 built on higher revenue growth, solid margins and a future P/E of about 31x.
🐻 Apple Bear Case
Fair value: US$207.71
Implied premium vs last close: 23.1% above this fair value based on the narrative inputs
Revenue growth assumption: 6.39%
Focuses on pressure points such as higher production costs from supply chain shifts, tougher EU rules, and the risk that services income tied to Google and Lightning accessories could shrink.
Questions how much growth Apple can achieve in lower income markets like India and South America given iPhone pricing, local competition, language and software fit.
Takes a cautious view on new products like Vision Pro and on hardware upgrade cycles, leading to more moderate revenue growth and a fair value of US$207.71 even with healthy profit margins and a future P/E of about 32x.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
