In the last five years, Apple (AAPL 2.48%) shares have soared 328%. This is a better gain than the overall market, which is impressive given the tech giant's massive size.

Even this year, this tech business has crushed the broader Nasdaq Composite Index. Investor optimism appears to have picked up a lot of steam lately.

But to be clear, buying this top FAANG stock right now doesn't look like a good idea unless this one thing happens. Here's something investors should think about.

Premium pricing

Apple is well-known for selling some of the most in-demand hardware products on the planet, like the iPhone, MacBook, and AirPods. These products have made Apple one of the most powerful brands, as well as one of the most profitable companies.

Most importantly, these hardware items possess pricing power. People seem to almost always be willing to pay for them. The average retail iPhone price is nearly $1,000.

Selling expensive merchandise agrees with the fact that Apple's share price also carries a premium price tag. After a monumental rise in the last few years, the stock currently trades at a price-to-earnings (P/E) ratio of 31. That's about a 50% premium to the S&P 500 and to Apple's trailing 10-year average valuation.

The current P/E multiple is the most obvious reason that investors should not buy the stock right now. Consequently, it only makes sense to add shares of Apple to your portfolio if the P/E ratio declines substantially.

No growth

Investors who pay the P/E of 31 right now should know exactly what they're buying. Apple's revenue in fiscal 2023 (ended Sept. 30) was down 2.8% year over year. Net income also declined by the same amount. Yet investors are being asked to pay a high valuation for shares.

I'm not trying to bash Apple. Without a doubt, this might be the most successful business of all time. I touched on its strong brand and popular products. What's more, services and software are continuing to become a bigger revenue and profit engine for the company, which can help drive margins up over time.

These non-hardware aspects of Apple's offerings also drive tremendous stickiness and loyalty from the customer base. Many companies wish they resonated with consumers the way that Apple does.

But I think there's one appropriate question to ask in this situation: What P/E multiple will Apple need to trade at for one to be comfortable buying the stock?

Based on the mature stage of the business, I'd have to say maybe a P/E of 20. Apple is currently posting zero growth and is registering falling sales and earnings. The stock last traded in this range in March 2020.

Now, should Apple somehow find ways to boost its top line over the next few years, then I'd be willing to pay a higher multiple. This could happen with a new game-changing product, like the rumored car. It could also happen with new software capabilities.

As things stand today, however, there's no way to predict these things with certainty. We have to use the facts in front of us. Unless the stock gets cheaper, this isn't a good setup for market-beating returns in the years ahead.