Apple's continuing share decline means that the company is now trading for about 11.6 times earnings, despite its massive growth rates over the past three, five, and 10 years. The company now falls into an exclusive club, valuation-wise. Of the nearly 2,000 U.S.-listed companies worth more than a billion dollars, only 16 have a P/E less than 15, and three-year compounded revenue growth of more than 50%.
Apple is one of those companies. Most impressively, it's worth more than $450 billion more than the next closest company on the list. Yet, Apple's sheer size demonstrates why the company can't be considered "cheap" purely based on past growth. If the company were to grow sales at a compounded growth rate less than half of their rate over the past five years -- 25% -- Apple would exit the half decade with more in total sales than massive retailer Wal-Mart sells today.
In the video below, senior technology analyst Eric Bleeker explains the uniqueness of Apple's valuation, and why he still considers it a better buy than big tech peers like Intel and Microsoft.
Apple is one of the fastest-growing companies across the past decade, but is now trading at a P/E below Microsoft. To answer whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.
The article Is Apple the Cheapest Stock in the Market? originally appeared on Fool.com.
Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Intel, and Microsoft. Motley Fool newsletter services recommend Apple, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.