EPS-Based DCF Values Apple at $196.29, Signaling 34.6% Overvaluation
Apple’s EPS-based DCF model estimates intrinsic value at $196.29, implying a 34.6% overvaluation relative to its current $264.18 share price. A free cash flow DCF pegs intrinsic value at $172.25 for a 53.4% safety margin, while AlphaQuest LLC added 2,731 shares worth $695,000 in the third quarter.
1. EPS-Based DCF Analysis
Apple’s EPS-based DCF model, using EPS without NRI of $7.91 and a 10% discount rate, projects an intrinsic value of $196.29 per share. The two-stage model applies a 15.2% growth rate for 10 years followed by a 4% terminal growth rate.
2. Free Cash Flow DCF Valuation
A traditional free cash flow DCF, based on trailing twelve month FCF per share, yields an intrinsic value of $172.25, implying a 53.4% margin of safety relative to the current share price.
3. Institutional Purchase by AlphaQuest LLC
AlphaQuest LLC acquired 2,731 shares of Apple in the third quarter, investing approximately $695,000 in the iPhone maker’s stock, signaling continued institutional interest despite overvaluation signals.