What Is Apple Inc. Stock Really Worth?

Apple (NASDAQ: AAPL  ) gets its fair share of headlines. With such an active rumor mill, it's easy for Apple investors to get caught up in short-term nonsense that often has no impact whatsoever on the underlying business. So in the following video, Fool contributor Daniel Sparks stepped back to get a big-picture look at Apple stock today.

Apple is a cash cow. In fact, in the trailing 12 months Apple has raked in a whopping $44.2 billion in free cash flow. Is the market appropriately valuing this healthy stream of cash produced by a market leader? Daniel doesn't think so. In fact, he argues that a conservative discounted cash flow valuation suggests Apple is trading at a 30% discount to fair value.

Check out the video to see what exactly Daniel thinks Apple stock is worth.

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Comments from our Foolish Readers

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  • Report this Comment On March 02, 2014, at 11:56 AM, spwangsu wrote:

    Yes, fools on!

    For AAPL, the real problem is not how much its fair value worth, its problem is how much risk it has if Tim Cool fails to bring new products to the market and keeps innovation in advance of its competitors. With all these risks included, do you still think AAPL is undervalued by 30%? By the way, in the view of its profit, isn't AAPL more and more looking like a one-trick pony now?

  • Report this Comment On March 02, 2014, at 1:06 PM, jjc0319 wrote:

    3 words: Dollar Cost Averaging. I've been buying about 5 shares per month for the last year. I now own 53 shares with plans to buy more on dips. (I just bought 3 more shares at $520 last week). My overall cost per share is below $440 not including dividends.

    If revenue is flat the stock should trade between $500 - $600. If Apple releases a larger iPhone (or two!) this year it should add market share as could an iWatch.

    I'm not sure Apple will gain 30% in the next year or so; but the stock seems like a no brainer. Low debt, high profit, #1 recognized brand in the world.

  • Report this Comment On March 03, 2014, at 11:54 AM, brettdrum wrote:

    I"ve been watching the market pretty closely since about 1990 , and have lived through some big crashes and lots of booms , and my main area of focus has been tech .... and what I've learned is that these analyses like the one in this video mean absolutely nothing . Using the same logic Facebook, Twitter, LInkedin and Tesla are worth virtually nothing.

    Unfortunately, based on the actual situation in the market , Profit/Earnings/cashlflow/cash reserves all mean nothing because the public determine the price if they buy or sell .... So... is Apple worth more .. in my opinion , yes because its solid and will continue to grow so at some point the idiotic public (thats me) will start getting greedy again about Apple and up goes the price .... In my opinion, Apple is way over sold and will reach its all time high and go way past that before it does something ACTUALLY stupid like the 20 things Microsoft, Nokia, Yahoo, Blackberry did before their stocks died.

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