Apple Inc. (AAPL) Isn’t Dead, Is It?

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One brief look at the chart and it’s obvious that Apple Inc. (NASDAQ:AAPL) has consistently proven itself a dominant force against its competitors.  Its 43.66% 5 year average revenue growth rate is a game changer in and of itself.  That’s nearly double the revenue growth achieved by Google Inc (NASDAQ:GOOG), while it can hardly be mentioned in the same sentence with Hewlett-Packard and RIM.  Truly, the only ratio whereby any of the competitors above really beat Apple is the 5 year average gross margin. Google pulls down an impressive 67.80% here, but again gets crushed by Apple in the way of its ROE.  Hewlett-Packard Company (NYSE:HPQ) and RIM are priced incredibly cheap in terms of their free cash flow generation, but this is to be expected when considering the lower revenue growth and negative ROE.  Apple and Google’s pricing (both P/E and P/FCF) are baffling, though.  Despite significantly lower revenue growth and ROE, Google Inc (NASDAQ:GOOG) is priced over 2 times higher than Apple in terms of earnings and over 10 times higher in terms of free cash flow.

I understand that investor concerns have been largely driven by a decreasing growth rate, but 43.66% growth, even if it’s decreasing (at least in the short term), is still staggering.  Not to mention the fact that Apple is known for being one of the most innovative and revolutionary technology companies of our generation, so I doubt very much the declining growth rate will remain a concern.  As for the other concerns that Apple is facing increased competition, well, numbers don’t lie.  Not only do the numbers presented above prove Apple’s domination against competition, but Apple’s second quarter iPhone and iPad sales saw no slowing and easily beat analyst expectations.  Tim Cook also alluded to new, upcoming product introductions in Apple’s future, which if they’re anything like prior introductions, we’re in for a pleasant surprise.
In my opinion, not only is Apple Inc. (NASDAQ:AAPL) here to stay, but it’s here to continue doing what it does best – revolutionizing the technology industry and making our lives that much better in the process.  And with that, I believe Apple will continue to provide great value to its shareholders for what is quite frankly an incredibly cheap price.

The article Apple’s Not Dead (And Never Was) originally appeared on Fool.com and is written by Matthew McMichen.

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