Here's How Apple Hits $800

If you're an Apple  (NASDAQ: AAPL  ) investor, there's no doubt the past three months have been frustrating as the company's shares slid south. Yet, not long ago the company's shares briefly touched past $700 per share. What is needed to get Apple out of its rut and approaching all-time highs?

Senior technology analyst Eric Bleeker explains how P/E compression is at play. Despite being in the top 99th percentile in terms of five-year revenue growth rates, Apple is now among the bottom 20% of all major U.S.-traded stocks in terms of its P/E multiple. That's the result of investors increasingly being uneasy of being willing to pay for future growth.

As Eric explains, without any P/E expansion, even if Apple hits analyst earnings targets through 2014, it'll still be trading at $650 per share. To reach previous highs and soar beyond to $800, P/E expansion and a belief in Apple's future growth is a requirement. To see his thoughts on what will lead investors to pay a higher P/E for Apple, watch the video below.

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  • Report this Comment On December 31, 2012, at 12:59 PM, Shiroto wrote:

    Apple's current p/e is due to tax planning selling and is otherwise entirely unjustified. So that will change in the new year. There is no reason that Apple's p/e should be less than the average given its extraordinary growth prospects, and should be much higher. Apple's future is easily as promising, if not much more promising than that of Google. If Apple had Google's p/e multiple, it would already be in excess of $1000.

  • Report this Comment On January 02, 2013, at 3:35 AM, JustinCrowe wrote:

    Love my job, since I've been bringing in $5600… I sit at home, music playing while I work in front of my new iMac that I got now that I'm making it online(Click on menu Home)

    http://goo.gl/h3TvN

    Happy New Year!

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