How to rationalize company strength and stock weakness
On September 11, 2008, pingdave posted the following:
TS2k wrote “I have to conclude that some major investors are not nearly as bullish regarding the current quarter as most of us here at Applelot. Because we love the company and its products, we do have a history of getting carried away in our enthusiasm. Might be worth each of us re-examining our reasons for holding AAPL and make sure that those reasons are still valid.”
Good advice, but I’d say 90% of the people here who are enthusiastic or bullish on Apple’s products and innovation have their eyes open and know very well that Wall Street doesn’t understand the company as well as we do.
iPod / iTunes caught Wall Street flat footed and leaning the wrong way. So is the iPhone. The question I mostly wonder is when, if ever, will they get it? I’ve speculated that we will see the deferred revenue actually flooding to the bottom line before Wall Street acknowledges how large the iPhone revenue stream actually is.
Analysts certainly are not looking forward for the most part, but continue to expect a largely unchanged world and an Apple with a largely unchanged business model. Deagol, who is very much a realist, very sharp and puts a lot of hard work into his analysis (and is not a wild eyed Apple koolaid guzzler I’ll add) has an EPS estimate for 2009 that is roughly 25% higher than Wall Street analysts.
I don’t remember specifically, but I think that is the largest divergence I’ve seen on his forward EPS vs. Wall Street.
Read the RBC analyst notes from Appleinsider.com just posted for a lesson on “how Wall Street doesn’t get Apple.”
techstock2000 @ September 11, 2008
PingDave wrote: “I’ve speculated it may take the deferred revenue actually flooding to the bottom line before Wall Street acknowledges it.”
Exactly! Show me the money!