The AFB AAPL FQ3 Estimate Index

The Apple Finance Board (AFB) is home to many AAPL traders, investors and Apple product enthusiasts. Among the members of the AFB are well know independent analysts Daniel Tello (deagol), Horace Dediu (aysmco), Turley Muller and Andy Zaky. I serve as the moderator of the AFB under the DawnTreader moniker. 

AFB AAPL FQ3 Estimates

Each fiscal quarter active members of the AFB are polled for their estimates of Apple's quarterly performance based on product unit sales and financial outcome. This article highlights the anticipated financial outcome for the three-month period ended in late June (Apple's FQ3 2011). Tomorrow I will post the unit sales estimates from each index participant by product line that underpin these financial performance estimates. 

On average the 30 active AFB members participating in the June quarter index estimate Apple will report the following results for the company's third fiscal quarter:

AFB Member AAPL FQ3 Estimate Averages:

Revenue			$26,556	69.14%	(% YOY Revenue Growth)
Gross Margin			10,714	40.35%	(% of Reported Revenue)
Operating Expenses			2,542	9.57%	(% of Reported Revenue)
Pre-Tax Income			8,235	31.01%	(% of Reported Revenue)
Tax Expense			1,987	24.12%	(% of Pre-Tax Income)
Net Income			6,248	23.53%	(% of Reported Revenue)
EPS			6.66	89.61%	(% YOY EPS Growth)

All numbers in thousands except per share data.

During the first six months of the current fiscal year Apple's revenue rose 76.2% and eps rose 83.2% in year-over-year comparisons. As a group AFB members estimate the pace of revenue growth in the June quarter will have slowed slightly to 69.14%. However, the pace of eps growth is estimated to rise above the performance of the first six months of the current fiscal year to 89.61%.

Factors Impacting the June Quarter Financial Performance

The June quarter represents the first fiscal quarter in which Apple iPad sales are a factor in the prior-year performance. This factor alone will will have an impact on year-over-year revenue growth. iPad unit sales and the resulting revenue were not a factor in the prior-year financial performance comparisons in the December (FQ1) and March (FQ2) quarters.

Apple has effectively managed the growth in operating expenses relative to revenue growth. The company's ability to keep this major expense segment under 10% of reported revenue and the rate of growth of operating expenses well below the rate of growth of revenue is having a significant and positive impact on the company's earnings per share performance. AFB members are estimating the percentage of revenue that flows to the net income line will reach above 23.5%.

Robert Paul Leitao

Disclosure: The author is long AAPL shares

AAPL: The Coiled Spring

On Friday AAPL closed New York trading at $326.35, down $4.88 on the day. At that price Apple is trading at a price-earnings multiple of 15.55 times trailing 12-month earnings of $20.99 per share. This lowly valuation includes more than $70 per share in cash on Apple's balance sheet and is in the context of an earnings per share growth rate of 83.2% in the first six months of the current fiscal year. 

On June 12th I published my updated 12-month price target for AAPL of $590 per share.  At Friday's closing price of $326.35 a $590 target price might seem ambitious. It's an anticipated 80% rise in the share price in roughly 12 months. But as I will detail in this article, AAPL is trading not only at a low historical p/e multiple since the elimination of deferred revenue accounting on the iPhone in FQ1 2010, but is also trading significantly below the current price targets of the Wall Street pros. 

AAPL: The Coiled Spring

For this article I asked Jeff Fosberg of the Apple Finance Board to update his popular "coiled spring" graphic to reflect Friday's closing prices for three popular publicly traded enterprises: Amazon, Apple and Netflix. The graphic compares the valuations of the three companies based on current price-earnings multiples and the gap between the current median price target from Wall Street analysts and Friday's closing prices.

I do not view price-earnings multiples as an effective means to compare companies in dissimilar industries. Amazon, Apple and Netflix do not compete directly in their respective core markets and Apple's hardware products are revenue conduits for products and services offered by Amazon and Netflix. The markets for the Amazon Kindle and the Apple iPad only partially overlap. However, comparing the gap between current trading prices and Wall Street price targets makes for a compelling contrast between the valuations of the three companies.

No matter the 82.3% rise in eps in the first six months of Apple's current fiscal year, the average estimate among analysts calls for eps in FY2011 (ending in late September) of $24.76 versus $15.15 in FY2010, a gain of 63.4% with less than six months remaining in the one-year period. For FY2012 the current average eps estimate of $28.72 represents only a 16% gain above the estimated current fiscal year eps performance. 

The AFB AAPL Price Target Index - June 2011 Edition

The Apple Finance Board is home to some of the best known and hardest working independent AAPL analysts on the blogosphere. As a service to the members of the AFB, a popular and well respected discussion board, I'm hosting the index of AFB AAPL price targets and share price forecasts developed by the members. 

Index participants submitted AAPL price targets for the first trading day of the month following the release of Apple's quarterly earnings reports through May 1, 2012 and associated ranges for the share price. The dates chosen for the quarterly price targets represent the first trading day of the month following the release of Apple's quarterly earnings reports, providing time for the markets to adjust the company's valuation based on the the most recent quarterly numbers. 

Comments on the index can be made at the bottom of this post and for registered members of the AFB in the topic created specifically for this discussion.  

The graphs and data table below indicate the average AAPL price targets of the index participants. The price targets and price range forecasts of each of the participants is listed below the averages. Thank  you to the AFB members participating in the index for the benefit of our readers.

	AFB	Index	Averages
	Date	Low	High	Target
	Aug 1, 2011	352	418	397
	Nov 1, 2011	394	470	445
	Feb 1, 2012	438	518	498
	May 1, 2012	478	558	547

Thank You to PED And The Active Members Of The AFB

I'd like to extend a thank you to Philip Elmer-DeWitt at Apple 2.0 for another compelling quarterly comparison of AAPL estimates from the bloggers and the Wall Street pros. Over the past several quarters Mr. Elmer-DeWitt has been the catalyst for transforming AAPL analysis into a participatory sport.

As the moderator of the Apple Finance Board (AFB) I'd to thank my fellow AFB members and independent bloggers Horace Dediu, Dennis Hildebrand, Turley Muller, Daniel Tello and Andy M. Zaky for their participation in the Apple 2.0 quarterly estimate comparisons as well as AFB members Jeff Fosberg, Alexis Cabot, Luke Kittell, Chas McKenna, Patrick Smellie, Adam Thompson and Mark Beauch. This quarter I'd like to see more of the AFB members participating in the quarterly analyst comparisons enter the blogosphere. Each of you are standouts and should more actively publish your insights and analysis.

The purpose of Posts At Eventide is to provide a wide range of information and analysis on the performance of Apple Inc. Thank you to all of the active members of the AFB mentioned above for being an inspiration to continue the hard work.

Robert Paul Leitao

The AFB AAPL FQ2 Estimate Index

The AFB AAPL FQ2 Estimate Index

The active members of the Apple Finance Board are best described as an assemblage of talented individuals with colorful personalities. They are outspoken, hardworking and focused on understanding everything there is to know about Apple and the company's financial performance.

As a service to the members of the AFB, a popular and well respected discussion board, I'm hosting the revenue and earnings estimates for Apple's second fiscal quarter developed by members of the community. As the host of the index and commentator on the members and their entries I've published my quarterly estimates in a separate blog entry at Posts At Eventide. 

This is the second consecutive quarter AFB member quarterly estimates have been collected and published. Although several members are new to the quarterly estimate development process newness to publishing estimates belies years of studying Apple as a company and years of familiarity with the company's popular and award-winning products. 

The average estimate of the 24 AFB members participating in the FQ2 index indicates expected revenue of $25.746 billion and earnings per share of $6.39. This is in contrast to the current Wall Street consensus of $23.15 billion in revenue and eps of $5.32. The AFB member revenue estimate represents an expected 90.7% rise in revenue in the quarter and eps growth of 91.9% over the prior-year period. All numbers in the chart below are in millions except per share data. 

Knowing the active members of the AFB from years of moderating the discussion board, it's a pleasure to host the FQ2 index at Posts At Eventide. Comments on the index can be made below and for registered members of the AFB in the topic created specifically for this discussion. 

Robert Paul Leitao


(Post edited 04/10/2011 to include estimates from Andy M. Zaky)

The AFB AAPL Price Target Index - February 2011 Edition

The AFB AAPL Price Target Index - February 2011 Edition

The Apple Finance Board is home to some of the best known and hardest working independent AAPL analysts on the planet. As a service to the members of the AFB, a popular and well respected discussion board, I'm hosting the index of AFB AAPL price targets and share price forecasts developed by the members here at Posts At Eventide.

This post is an update to the initial AFB AAPL Price Target Index published in January. The participants in this index represent a cross section of AFB members ranging from well known AAPL analysts Horace Dediu, Daniel Tello, Turley Muller and Andy M. Zaky, to long-time AFB members Mark Beauch and Ron Smith and newer members such as Dennis Hildebrand. In all, twenty four (24) members of the Apple Finance Board are represented in the index.

AFB AAPL Price Target Index Averages

Index participants submitted AAPL price targets for the first day of the month following the release of Apple's quarterly earnings reports through February 1, 2012 and submitted associated ranges for the share price. Comments on the index can be made at the bottom of this post and for registered members of the AFB in the topic created specifically for this discussion.  Thank you to the index participants for submitting their share price targets and anticipated trading ranges. 

The graph and data table below indicate the average AAPL price targets of the two dozen index participants. 

The AFB AAPL Price Target Index

Please see The AFB AAPL Price Target Index - February 2011 Edition posted February 15, 2011 


The AFB AAPL Price Target Index

The active members of the Apple Finance Board are best described as an assemblage of talented individuals with colorful personalities. They are outspoken, hardworking and focused on understanding everything there is to know about Apple and the company's financial performance.

As a service to the members of the AFB, a popular and well respected discussion board, I'm hosting the the AAPL price targets and share price forecasts developed by the members here at Posts At Eventide. As the host of the index and commentator on the members and their entires, I'll be publishing my price targets and forecasts in separate posts at Eventide. 

This index is the second in a series of polls soliciting the input of AFB members. The AFB AAPL FQ1 Estimate Index was published on January 1, 2011. 

The participants in this index represent a cross section of AFB members ranging from well known AAPL analysts Horace Dediu under his asymco moniker and Daniel Tello, commonly known as deagol, to long-time members macorange and ChasMac77, and members who have joined the discussion group within the past year such as Gregg Thurman. 


AFB members tend to be bullish and their expectations for near-term appreciation in Apple's share price is evidenced in the numbers. AAPL closed today at $341.64, following the iPhone on the Verizon network announcement and ahead of next Tuesday's release of the company's results for the December quarter. The average share price target for May 1, 2011 of $385 per share evidences expectations of a more than 12.5% rise in the share price between now and the first day of the month following the release of the March quarter results. The average target price for just over a year from now calls for a nearly 57% share price advance from today's closing price.


Comments on the index can be made at the bottom of this post and for registered members of the AFB in the topic created specifically for this discussion.  

Below are the average price targets and share price ranges for the 13 AFB members participating in the index by providing projections for the selected dates:

	AFB	Index	Averages
	Date	Low	High	Target
	May 1, 2011	345	411	385
	Aug 1, 2011	377	455	425
	Nov 1, 2011	425	510	475
	Feb 1, 2012	476	581	536

The AFB AAPL FQ1 Estimate Index

The AFB AAPL FQ1 Estimate Index

The active members of the Apple Finance Board are best described as an assemblage of talented individuals with colorful personalities. They are outspoken, hardworking and focused on understanding everything there is to know about Apple and the company's financial performance.

As a service to the members of the AFB, a popular and well respected discussion board, I'm hosting the estimates for Apple's first fiscal quarter results developed by the members here at Posts At Eventide.  As the host of the index and commentator on the members and their entries, I'll be publishing my quarterly estimates in a separate blog post at Eventide before the end of the weekend. 

For many of the AFB members who submitted quarterly estimates for this index, it's their first effort at developing numbers for publication. However, newness to making public estimates belies years of studying Apple as a company and years of familiarity with Apple's popular consumer products. 

The average estimate of the 15 AFB members participating in the FQ1 index indicates expected revenue of $26.581 billion and earnings per share of $6.24. This is in contrast to the current Wall Street consensus of $24.12 billion in revenue and eps of $5.29. 

Knowing the active members of the AFB from years of moderating the board, it's a pleasure to host the FQ1 index at this Web presence. 

Comments on the index can be made below and for registered members of the AFB in the topic created specifically for this discussion. 

Robert Paul Leitao


Updated 01/08/10 to add final estimates from AFB members

The AFB AAPL FQ1 Estimate Index:

		Gross		Other	Income
Member Name	Revenue	Margin	OpEx	Income	Before Taxes	Tax Expense	Net Income	EPS
Nagrani	29,038	10,889	2,500		8,389	2,055	6,334	6.79
macorange	27,320						6,010	6.43
AHHA	25,801	9,804	2,200	25	7,629	1,640	5,989	6.43
JohnG	26,550							6.41
Tetrachloride	26,450							6.40
Gregg Thurman	26,981	10,306	2,482	60	7,884	1,932	5,952	6.38
awcabot	27,224	10,376	2,525	16	7,867	1,951	5,915	6.33
cdodge	27,215	9,988	2,521	25	7,487	1,572	5,915	6.33
pats	27,077	10,154	2,395	65	7,823	1,955	5,868	6.30
westech	26,975	10,251	2,500	60	7,811	1,835	5,975	6.29
ChasMac77	26,715						5,824	6.24
deagol	26,071	9,917	2,366	64	7,614	1,789	5,825	6.23
MichelC	26,732	10,158	2,500	36	7,694	1,924	5,735	6.14
CdnPhoto	25,462	10,312	2,300	65	8,077	2,359	5,718	6.12
Red Shirted Ensign	25,500	9,792	2,682		7,110			6.09
Mercel	25,987	9,719	2,400	25	7,344	1,689	5,655	6.05
snoozzzer	25,290	9,610	2,500	75	7,185	1,688	5,496	5.89
mbeauch	25,663	9,495	2,500	75	7,070	1,768	5,303	5.67
Average	26,558	10,055	2,455	49	7,642	1,858	5,834	6.25

Numbers are in millions except earnings per share.