Comment by pama
16 hours ago
The price over earnings (arguably an imperfect, but better way to compare stock prices against each other than using pure revenue) for Apple has been fluctuating within about a factor of 2 for the last 20 years. Since before the iPhone, people were nervous about the possibility of sustained growth of profits of the company, and the P/E was similar to today. Once Apple started making a lot more money under Tim Cook, the price was at a relative discount becauee 10 years ago people were certain (but wrong) that this run would end soon and badly. The long term stability under Cook was truly impressive. Lets see what the markets think abiut the leadership change tomorrow, but probably this is not an immediate event.
pe ratio under 10 in 2013 to ~40 in 2024. You can't deny the multiple expansion.
To be fair, a PE <10 didn't even represent the ground truth of customer's relationship to Apple at the time. In hindsight we have a lot more information, but in that era there was still a lingering question of whether their iPhone advantage was durable, due to Android competitors. It only later became apparent that the stickiness factor was super high.
From a correct pricing perspective, of all the companies in tech Apple seems one of the most likely to keep customers for a lifetime. They have immense lock-in and customer affinity. I don't know if the correct number is 20 or 30 or 40 but unless the economy completely tanks (which tbf is reasonably possible these days), I can only imagine a majority of their customers today will still be their customers in 15-20 years.