BlueChip Breakdown: Apple ($AAPL)

Date: August 4th, 2025 By: Will Svendsen

📌Company Snapshot

Sector: Consumer Technology / Hardware & Services

Market Cap: ~$3.02T

Business: Designs, manufactures, and sells consumer electronics (iPhone, Mac, iPad), software, and digital services

Core Revenue Driver: iPhone sales & Services revenue (App Store, iCloud, Apple Music, etc.)

📈Recent Performance

Down 17% YTD, Up 1.76% over last 3 months

Strong Q3 FY25: EPS $1.57 (↑12%), revenue $94B (↑10%)

Continued growth in Services and Wearables

$100B buyback and 4% dividend hike announced

Some macro/tariff concerns linger amid global supply risks

📊Key Metrics & Valuation

P/E (FWD): ~30.8

EV/EBITDA: ~23x

FCF Yield: ~3.2%

PEG Ratio: ~2.2

Revenue CAGR (past 5 yrs): ~7%

💰DCF Summary

WACC: 8.0%

FCF CAGR (next 5 yrs): ~5.5%

Terminal Growth Rate: 2%

Intrinsic Value Estimate: ~$155–175/share

Market Price: ~$203/share

Implied Downside: ~13–25%(Assumes moderate growth in Services, flat iPhone units, and stable margins)

⚡Catalysts to Watch

Continued expansion of Services and subscription offerings

New product cycle (iPhone 17, Vision Pro updates)

AI enhancements to Siri, iOS, and on-device processing

China demand recovery and potential India supply chain ramp-up

⚠️Risks to Monitor

Trade/tariff exposure (esp. China) and regulatory pressure

Slower device upgrade cycles, especially for iPhones

Limited AI narrative vs. peers like MSFT, NVDA

Compressed margins from rising R&D and FX headwinds

📌Final Take

Rating: Hold / Watchlist

Apple is a best-in-class business with an iconic brand, elite margins, and massive cash generation. However, its valuation reflects perfection. Unless AI integration or new product innovation accelerates growth meaningfully, upside is limited at current levels. Better buy zones may come on broader tech pullbacks.

📚Sources:

1. Yahoo Finance – AAPL Overview

2. Apple Investor Relations – Q3 FY25 Results

3. ValueInvesting.io – DCF Valuation

4. GuruFocus – Intrinsic Value & FCF

5. Investors.com – Apple Earnings Recap