Nearly two years ago, Apple (NASDAQ:AAPL) launched the iPhone 5. This was a radical departure from the prior generation iPhones in a number of key ways, including -- but not limited to -- an A6 processor with custom CPU cores, an aluminum chassis (complete with chamfered edges), a much improved display, and much more. The phone was a critical and commercial success, but unfortunately significant margin compression took its toll on Apple's bottom line.

Apple's market cap peak
At its $705 presplit share price, Apple's market capitalization was about $663 billion -- an impressive feat, especially considering that Apple didn't need any tech-bubblelike multiples to get there. As of the time of writing -- split unadjusted -- Apple stock trades at $670. But as far as market capitalization goes, Apple is still quite a ways off from its all-time high.

Indeed, thanks to a very aggressive (and shareholder friendly) buyback program, Apple commands "only" a $577 billion market capitalization. This is still about $86 billion off of Apple's all-time highs.

Can Apple reclaim its past highs?
If Apple were to recover to its market capitalization high, then the stock would be trading at about $110 per share, split adjusted. Now, to be completely fair, note that Apple's net income for fiscal year 2012 came in at $41.7 billion -- a record that Apple has yet to be able to hit again.

In fact, during the company's fiscal 2013, it "only" generated $37 billion in net income. This was driven by a $1.9 billion increase in operating expenses and a $4.5 billion drop in gross profit. These were partially offset by a $600 million boost in other income.

Fiscal 2014 looks as though it's on track to be an improvement over fiscal 2013, with consensus sitting at $38.78 billion. Interestingly enough, if we dig deeper into the consensus estimates for the next few years, it looks like the expectation is that Apple doesn't overtake its 2012 net income peak until fiscal 2016.

Does this mean we have to wait until 2016 for $110?
If it's going to take a couple of years to blow past fiscal 2012 net income numbers, does this mean that investors are going to need to wait until fiscal 2016 to get to $110? Well, the answer is probably "no" for a number of reasons:

  1. Buyback continues to lower share count. Apple is extremely serious about bringing down the share count, so even as investors wait for net income to hit new highs, the company will continue to bring down the share count, lowering the market capitalization bar to get to $110 per share.
  2. Consensus is meant to be broken. The consensus estimates represent sell-side analysts' best guesses as to what kind of revenue/profit numbers that Apple will ultimately do. Apple could fundamentally disrupt those numbers with a hit new product, unexpected market share gains, and so on. Consensus merely represents the bar, and Apple could very well jump right over it.

In fact, to that last point, there's more to take a look at.

Why the sell-side could be playing it safe
The numbers from the sell side, which imply that Apple won't get back to its net income peak until the end of fiscal 2016, actually seem to be a bit conservative. 

Indeed, Apple has a number of tailwinds that should begin to kick in quite forcefully beginning this fall including two new high end iPhone 6 models (which should help Apple gain meaningful share in the high margin, high end portion of the smartphone market), likely refreshed iPad models with Touch ID (and as the iPhone 5s proved, Touch ID is a "must have" feature), and potentially even an iWatch. 

Though most of the impact of these products will be in fiscal year 2015 rather than fiscal 2014 (this year), the current consensus of operating profit growth in fiscal 2015 of less than $3 billion over fiscal 2014 seems very conservative. And if that number is off, the rest of the numbers -- which use the fiscal 2014 and 2015 estimates as a baseline -- could prove too low as well. 

And, if that turns out to be the case, and if Apple continues on its buyback spree, the stock could hit $110 sooner rather than later.