Showing posts with label earnings. Show all posts
Showing posts with label earnings. Show all posts
Wednesday, January 27, 2010
Netflix Q4 results
Netflix announced their fourth quarter results, disclosing a 36% increase in profits, and a 31% increase in subscriber base (now over 12 Million) and saw a positive market response of a 13.24% increase in their stock price.
Thursday, January 15, 2009
Is Apple ripe?
I couldn't help partially stealing the title of this article: "BUY OR SELL - Are Apple shares ripe for buying?" the article is essentially discussing whether the market is too heavily discounting Apple shares following the news of Steve Jobs (Apple's CEO) taking leave for health reasons.
As I have mentioned in class a few times now, market prices in the current market suggest to me that we are currently in a buyer's market.
Let's consider Apple's price at around $83 per share (at the time of writing). That's about a PE (price to earnings) ratio of under 16.5, the lowest PE ratio for Apple in the last 5 years is about 15.9 (note that the forward PE ratio, that is when the earnings are the expected earnings for this year and not last year's, the ratio drops to around 11). With an ROE (return on equity) of about 27 and sales growth in excess of 20% how can we reconcile the apparent strength of the company's financials with their PE ratio?
If we think about our model of value, what does this suggest that the market "feels" about the earnings of Apple? For example, does it seem like the pricing is reflecting a low sustainability (or persistence) of this past performance?
Does it appear that the sustainability of their earnings is low?
Does one individual make that much of a difference to the strategy of the company?
Or maybe, it's being undervalued due to speculation...?
As I have mentioned in class a few times now, market prices in the current market suggest to me that we are currently in a buyer's market.
Let's consider Apple's price at around $83 per share (at the time of writing). That's about a PE (price to earnings) ratio of under 16.5, the lowest PE ratio for Apple in the last 5 years is about 15.9 (note that the forward PE ratio, that is when the earnings are the expected earnings for this year and not last year's, the ratio drops to around 11). With an ROE (return on equity) of about 27 and sales growth in excess of 20% how can we reconcile the apparent strength of the company's financials with their PE ratio?
If we think about our model of value, what does this suggest that the market "feels" about the earnings of Apple? For example, does it seem like the pricing is reflecting a low sustainability (or persistence) of this past performance?
Does it appear that the sustainability of their earnings is low?
Does one individual make that much of a difference to the strategy of the company?
Or maybe, it's being undervalued due to speculation...?
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