Are Apple's (NASDAQ:AAPL) growth prospects brighter today than at any point in the past decade? Given that the iPhone is no longer much of a growth business at all, probably not. But after an 85% rally in 2019, Apple stock is at its most expensive in at least the past 10 years.

Based on fiscal 2019 earnings per share, Apple's price-to-earnings ratio is now above 25. While that's not astronomical in an absolute sense, this is a company that's already worth more than $1.3 trillion. And it's a company's where share buybacks are propping up per-share earnings as net income declines.

AAPL PE Ratio Chart

AAPL PE Ratio data by YCharts

The iPhone is in decline

Apple's most important business is the iPhone, both because it directly generates the majority of the company's revenue, and because many of Apple's other products and services ultimately depend on it.

In fiscal 2019, the iPhone produced $142.4 billion of revenue, down 13.6% year over year. Overall revenue was only down slightly, thanks to growth in other areas.

Those other areas, which include wearables like the Apple Watch and AirPods, and various services, are promising growth businesses for Apple. But they so far haven't been able to entirely offset falling iPhone revenue.

Apple may see a rebound in iPhone revenue this year, thanks to the iPhone 11 family. Demand appears to be solid in the U.S., partly because of a price cut on the entry-level phone. The cheapest iPhone 11 sells for $699, a $50 reduction compared to 2018's iPhone XR.

But demand in China, the second-largest geographical region for Apple, is anything but solid. iPhone sales in China plunged 35.4% on a year-over-year basis in November, according to Credit Suisse, even as the overall smartphone market remained roughly flat.

A 5G iPhone, expected to launch this year, could boost potentially boost Apple's sales. But that depends on consumers clamoring for 5G devices, which is far from a guarantee.

A smartphone with a cracked screen.

Image source: Getty Images.

Earnings are declining, too

Apple managed to report roughly flat per-share earnings in fiscal 2019, but that feat required spending billions of dollars buying back its own shares. The company hurled nearly $67 billion into share buybacks last year, reducing the share count by close to 7%.

While Apple's operating income plunged 9.8%, and net income dropped 7.2%, per-share earnings remained roughly the same. Apple was not a growth business at all last year.

Analysts are expecting a return to per-share earnings growth in fiscal 2020, calling for a 10% increase. But much of that growth will likely be driven by more share buybacks, and it hinges on how dire Apple's situation in China really is.

Growing sales of wearables will help the cause for Apple in 2020. The Apple Watch is a successful product, and AirPods are selling like hotcakes. Services will produce revenue growth as well, but Apple's most high-profile services are unlikely to contribute much, if anything, to the bottom line anytime soon.

Apple Music suffers from the awful economics of the music streaming industry, and Apple TV+ will require billions in content spending for years before it has any chance at turning a profit. Even Disney doesn't expect its Disney+ streaming service to be profitable until 2024, and Disney owns a vast catalog of high-quality content that Apple lacks.

Apple looks really expensive

Apple isn't a growth stock. If the company does manage to grow earnings, it won't be very fast, given that the iPhone and heavy spending on content will be weighing down everything else. And buybacks will likely remain the key driver of per-share earnings growth.

Apple probably isn't all that recession proof, either. Smartphones have become a necessity, but that won't prevent consumers from delaying upgrades or simply choosing older iPhone models instead of the latest and greatest. And pricey products like the Apple Watch and AirPods are entirely discretionary.

Some of the rally in Apple stock last year may have been driven by investors seeking a safe haven as trade tensions escalated and recession fears grew. But trading at 25 times earnings, it's hard to imagine that Apple stock will hold up well if economic conditions head south.