Is this Apple (NASDAQ:AAPL) report half-full or half-empty? The answer very much depends on what you expect out of the gadget guru's third-quarter report Tuesday night.

First, the bullish case
There is no doubt in my mind that Apple will blow Wall Street's average earnings target out of the water. For one, the company is on a 25-quarter streak of straight outperformance reports. For another, cheery reports out of suppliers like Intel (NASDAQ:INTC) point to unusually good news -- even by Apple's lofty standards.

Apple is widely expected to have sold at least 4.5 million iPhones, 10 million iPods, and 2.4 million Macs this quarter. The standout performer is naturally the iPhone, with more than 1 million iPhone 3GS handsets sold in its first weekend on the market. A year ago, the iPhone shipped just 720,000 units in the third quarter.

That's great news, since we also know that the iPhone is a high-margin beast that drives Apple's profits like Evel Knievel on a caffeine IV drip. Smartphones are where it's at now: Apple and BlackBerry maker Research In Motion (NASDAQ:RIMM) make mincemeat out of most rivals' gross margins. For example, Motorola (NYSE:MOT) collects gross margins that are within 5% of notorious low-cost retailer Wal-Mart (NYSE:WMT). Apple likely doubles Wal-Mart’s haul with the unstoppable iPhone.

So Apple is growing in all the right places, raking in cash hand over fist. Surely that's good enough to support a premium-priced stock?

Then the bears attack
Heck, no (and stop calling me Shirley!).

Apple's stock is trading at about 27 times trailing earnings. In order to justify that kind of premium, the company needs to continue high growth rates well into the future. And sure, Apple has been running well above a 27% growth rate (for the PEG ratio fans out there) since its iPod-fueled rebirth in the early 2000s, but the company is also growing up quickly.

Do you really believe that Apple will double its earnings in three years, or triple them in five? With $5 billion in trailing earnings, Apple is already swimming with the big boys of the business world. If you triple that massive growth base, Apple would skip ahead of current earnings at Wal-Mart, Procter & Gamble, and Big Blue IBM (NYSE:IBM). Not bloody likely, mate.

The share price has doubled in six months while the S&P 500 benchmark settled for a leisurely 17% recovery. I believe that Mr. Market has created an overvalued monster here, and this report would have to be mighty good indeed to support this lofty valuation. I have better ideas for the smartphone-hungry investors out there.

An Apple a day keeps the long-term gains away! (Don't agree? Feel free to discuss below.)

Further Foolishness:

Apple is a Motley Fool Stock Advisor selection. Intel and Wal-Mart Stores are Motley Fool Inside Value selections. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.