Source: Flickr user Karlis Dambrans. 

What: Shares of technology behemoth Apple (NASDAQ:AAPL), the largest company in the world by market cap, sank by $0.26 in Thursday's trading session to close at $128.45 despite a price target hike from analysts at RBC Capital Markets. The move lower ended a seven-session winning streak for Apple, although its shares did strike a fresh all-time intraday high of $129.03 during the session.

So what: According to RBC Capital Markets' covering analyst, Amit Daryanani, who kept an "outperform" rating on Apple (the equivalent of a "buy"), three words should be more than enough to propel Apple shares higher: free cash flow.

Daryanani and his team believe that Apple will be able to boost its share buybacks and its dividend in accordance with its rising free cash flow, which is expected to increase by a double-digit percentage through 2016. Daryanani notes that Apple has increased its capital returns in each successive year, with Apple offering $45 billion in share buybacks in 2012, $100 billion in 2013, and $130 billion in April 2014. RBC Capital Markets' team believes this figure could go as high as $200 billion over a three-year period.

Source: via Flickr.

Based on historic figures and their own estimates, Daryanani and RBC estimate that Apple will produce $66.6 billion in free cash flow in 2015 (up from $50.1 billion in FCF for 2014), and $73 billion in 2016. Even if Apple's free cash flow return drops off to just 100% (it was 112% in 2014), Apple could buy back nearly $50 billion of its own stock in 2015, and close to $55 billion in 2016. In addition, it could raise the $11.1 billion paid out in dividends in 2014 to $16.64 billion in 2015 and $18.25 billion in 2016. If you're curious, this works out to around $3.13 a share, or a 2.4% yield by 2016 based on its current price.

In total, with $178 billion in net cash on hand and 44% of its FCF expected to be generated within the U.S., RBC Capital believes Apple is worth $140, up from its prior price target of $130. At $140 Apple as a company would be worth $815 billion.

Now what: The $64,000 question then becomes: Can Apple really reach a valuation in excess of $800 billion?

Perhaps what investors really need to ask is if Apple is still a growth company. If the answer is "yes," then an $800 billion valuation at some point in the future could be just the start.

Source: Flickr user Robert.

Apple's first-quarter results and its recent product introduction would certainly suggest it's still very much a growth stock. During the holiday quarter Apple sold 74.5 million iPhones, and in 2014 introduced the world to its own mobile near-field-communication-based payment platform known as Apple Pay, as well as prepared the world for the launch of the Apple Watch in 2015. Just this week we also learned about plans to introduce an Apple car by 2020.

Even if some of these innovations don't pan out as expected, Apple still has plenty of growth from tapping developing and emerging market territories. Its moves into China, Russia, and other rapidly growing markets can sustain sales growth, while its core U.S. market will continue to supply it with beefy margins and a cult-like following for new devices.

In short, excluding its cash Apple is still very inexpensive considering all of the new innovations it recently launched or is planning to launch shortly. I would suggest long-term investors continue to look at this tech giant as a possible investment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.