AAPL
AAPL
Hold 2026-03-31
Model
DCF
Price at Report
$246.63
Base IV
$195.38
Bear IV
$113.97
Bull IV
$406.02
Entry Zone: 192-228 · Sell Above: 340
Bore Family Office
Valuation Report — Apple Inc. (AAPL) • March 31, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.00% • Current Price: $246.63
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Apple Inc. designs, manufactures, and markets smartphones (iPhone), personal computers (Mac), tablets (iPad), wearables (Apple Watch, AirPods), and a growing portfolio of high-margin services (App Store, iCloud, Apple TV+, Apple Pay, AppleCare). Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple is the world's most valuable public company (~$3.6T market cap). The core flywheel: 2.2 billion active devices generate ~$123B in annual free cash flow at 75%+ service gross margins — a business model with minimal capital requirements and extraordinary predictability.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| iPhone | $211,000M | 51% | +2.0% | — | Core; AI iPhone upgrade cycle beginning FY2026 |
| Services | $96,000M | 23% | +14.0% | — | App Store, iCloud, TV+, Pay — 75%+ gross margin |
| Mac | $31,000M | 7% | +16.0% | — | M-series chip driving market share gains |
| iPad | $26,000M | 6% | +15.0% | — | iPad Pro driving ASP expansion |
| Wearables | $36,000M | 9% | -7.0% | — | Apple Watch + AirPods; near saturation |
| Other | $16,000M | 4% | +5.0% | — | AppleCare, accessories |
| Blended Growth Rate | — | 100% | +5.8% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 62.0% | ≥12% strong |
| FCF Margin | 23.7% | ≥10% strong |
| Debt / EBITDA | 0.0x | ≤2x conservative |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $365,817 | $394,328 | $383,285 | $391,035 | $416,161 |
| Rev YoY Growth | — | +7.8% | -2.8% | +2.0% | +6.4% |
| Gross Margin | 41.8% | 43.3% | 44.1% | 46.2% | 46.9% |
| EBITDA ($M) | $120,233 | $130,541 | $125,820 | $134,661 | $144,748 |
| EBITDA Margin | 32.9% | 33.1% | 32.8% | 34.4% | 34.8% |
| Operating Income ($M) | $108,949 | $119,437 | $114,301 | $123,216 | $133,050 |
| Operating Margin | 29.8% | 30.3% | 29.8% | 31.5% | 32.0% |
| Net Income ($M) | $94,680 | $99,803 | $96,995 | $93,736 | $112,010 |
| Net Margin | 25.9% | 25.3% | 25.3% | 24.0% | 26.9% |
| EPS (diluted) | $5.61 | $6.11 | $6.13 | $6.09 | $7.46 |
| Free Cash Flow ($M) | $92,953 | $111,443 | $99,584 | $108,807 | $98,767 |
| Annual DPS | $0.850 | $0.900 | $0.940 | $0.980 | $1.020 |
| Total Debt ($M) | — | — | — | — | — |
💹 Capital Return & Share Count Analysis
Net Share Change
-11.0% (2021→2025)
📉 Net reduction — buybacks exceed issuances
EPS Amplification
EPS grew +33.0% vs net income +18.3% over the period — +14.7pp of EPS growth amplified by share reduction.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 16865.0M | — | $85,971 | 2.1% |
| 2022 | 16326.0M | -3.2% | $89,402 | 2.2% |
| 2023 | 15813.0M | -3.1% | $77,550 | 2.0% |
| 2024 | 15408.0M | -2.6% | $94,949 | 2.5% |
| 2025 | 15004.0M | -2.6% | $94,000 | 2.5% |
Apple runs the world's largest share buyback program — ~$94B/yr, entirely self-funded from FCF with no incremental debt. Share count has declined ~11% over 4 years (16.9B → 15.0B). This mechanically amplifies per-share metrics: FY2025 net income grew +19.5% but EPS grew +22.5% — 3 percentage points from buybacks alone. Apple holds $47B net cash. The buyback is sustainable and disciplined.
📈 DCF Scenarios
$114
🔴 Bear
$195
📊 Base
$406
🚀 Bull
$246.63
Current Price
$297
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 1.5% | 1.5% | 9.50% | $114 | ▼53.8% |
| 📊 Base | 7.0% | 3.5% | 2.5% | 8.00% | $195 | ▼20.8% |
| 🚀 Bull | 12.0% | 6.0% | 3.0% | 6.50% | $406 | ▲64.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 1.5% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $126.69B | $115.70B | $115.70B |
| Year 2 | Stage 1 | $130.49B | $108.83B | $224.53B |
| Year 3 | Stage 1 | $134.41B | $102.37B | $326.90B |
| Year 4 | Stage 1 | $138.44B | $96.29B | $423.19B |
| Year 5 | Stage 1 | $142.59B | $90.58B | $513.77B |
| Year 6 | Stage 2 | $144.73B | $83.96B | $597.73B |
| Year 7 | Stage 2 | $146.90B | $77.83B | $675.56B |
| Year 8 | Stage 2 | $149.10B | $72.14B | $747.70B |
| Year 9 | Stage 2 | $151.34B | $66.87B | $814.57B |
| Year 10 | Stage 2 | $153.61B | $61.98B | $876.55B |
| Terminal | — | TV=$1948.9B | PV(TV)=$786.4B (47% of EV) | EV=$1663.0B |
| Intrinsic Value | — | — | EV $1663.0B − Net Debt → Equity / Shares | $114 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.50%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $1948.9B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $786.4B). Enterprise Value = PV of FCFs ($876.6B) + PV of TV ($786.4B) = $1663.0B. Subtracting net debt gives equity value of $1710.0B, divided by shares outstanding = $114 per share.
Base Scenario
Stage 1: 7.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $131.61B | $121.86B | $121.86B |
| Year 2 | Stage 1 | $140.82B | $120.73B | $242.59B |
| Year 3 | Stage 1 | $150.68B | $119.61B | $362.21B |
| Year 4 | Stage 1 | $161.23B | $118.51B | $480.72B |
| Year 5 | Stage 1 | $172.51B | $117.41B | $598.13B |
| Year 6 | Stage 2 | $178.55B | $112.52B | $710.64B |
| Year 7 | Stage 2 | $184.80B | $107.83B | $818.47B |
| Year 8 | Stage 2 | $191.27B | $103.34B | $921.81B |
| Year 9 | Stage 2 | $197.96B | $99.03B | $1020.84B |
| Year 10 | Stage 2 | $204.89B | $94.90B | $1115.75B |
| Terminal | — | TV=$3818.4B | PV(TV)=$1768.7B (61% of EV) | EV=$2884.4B |
| Intrinsic Value | — | — | EV $2884.4B − Net Debt → Equity / Shares | $195 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.00%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $3818.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $1768.7B). Enterprise Value = PV of FCFs ($1115.7B) + PV of TV ($1768.7B) = $2884.4B. Subtracting net debt gives equity value of $2931.4B, divided by shares outstanding = $195 per share.
Bull Scenario
Stage 1: 12.0% | Stage 2: 6.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $137.76B | $129.35B | $129.35B |
| Year 2 | Stage 1 | $154.29B | $136.03B | $265.38B |
| Year 3 | Stage 1 | $172.81B | $143.06B | $408.44B |
| Year 4 | Stage 1 | $193.54B | $150.45B | $558.89B |
| Year 5 | Stage 1 | $216.77B | $158.21B | $717.10B |
| Year 6 | Stage 2 | $229.77B | $157.47B | $874.57B |
| Year 7 | Stage 2 | $243.56B | $156.73B | $1031.31B |
| Year 8 | Stage 2 | $258.17B | $156.00B | $1187.30B |
| Year 9 | Stage 2 | $273.66B | $155.26B | $1342.57B |
| Year 10 | Stage 2 | $290.08B | $154.54B | $1497.10B |
| Terminal | — | TV=$8536.8B | PV(TV)=$4547.8B (75% of EV) | EV=$6044.9B |
| Intrinsic Value | — | — | EV $6044.9B − Net Debt → Equity / Shares | $406 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (6.50%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $8536.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $4547.8B). Enterprise Value = PV of FCFs ($1497.1B) + PV of TV ($4547.8B) = $6044.9B. Subtracting net debt gives equity value of $6091.9B, divided by shares outstanding = $406 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.0% | $257 | $280 | $309 | $347 | $401 |
| 6.5% | $231 | $248 | $270 | $297 | $334 |
| 7.0% | $209 | $223 | $239 | $260 | $287 |
| 7.5% | $191 | $202 | $215 | $231 | $251 |
| 8.0% | $176 | $185 | $195 | $208 | $223 |
| 8.5% | $163 | $170 | $179 | $189 | $201 |
| 9.0% | $152 | $158 | $165 | $173 | $183 |
| 9.5% | $142 | $147 | $153 | $160 | $167 |
| 10.0% | $134 | $138 | $143 | $148 | $155 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Price | Mkt Cap | P/E (FY1) | EV/EBITDA | FCF Yield | Rev Growth FY26E | FCF Margin |
|---|---|---|---|---|---|---|---|
| AAPL ← (this report) | $246.63 | $3.6T | 28.4× | 24.4× | 3.4% | +14% | 23.7% |
| MSFT (Microsoft) | ~$361 | $2.7T | 31.2× | 22.1× | 3.1% | +15% | 28.5% |
| GOOGL (Alphabet) | ~$174 | $2.1T | 20.1× | 14.2× | 4.8% | +12% | 22.1% |
| META (Meta) | ~$532 | $1.3T | 23.4× | 16.1× | 4.2% | +16% | 38.2% |
| AMZN (Amazon) | ~$201 | $2.1T | 32.1× | 22.0× | 3.0% | +10% | 11.3% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.020 |
| Current Yield | 0.41% |
| Consecutive Growth Years | 13 |
| 1-yr DPS CAGR | +4.0% |
| 3-yr DPS CAGR | +2.7% |
| 5-yr DPS CAGR | +3.7% |
| 10-yr DPS CAGR | +7.2% |
| Payout Ratio (DPS/EPS) | 13.7% |
| FCF Payout Ratio | 1.0% |
| Sustainability Verdict | ✅ Safe |
Apple's $1.02/yr dividend yields 0.41% and consumes <1% of FCF — it is effectively token. The real capital return is ~$94B/yr in buybacks. The dividend has grown 13 consecutive years at ~7% CAGR and will continue indefinitely. Zero dividend cut risk.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $5.61 | — | — | — | Actual |
| 2022 | $6.11 | — | — | — | Actual |
| 2023 | $6.13 | — | — | — | Actual |
| 2024 | $6.09 | — | — | — | Actual |
| 2025 | $7.46 | — | — | — | Actual |
| 2026 | $7.99 | $8.68 | $9.29 | 48 | Estimate |
| 2027 | $8.30 | $9.53 | $10.87 | 46 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $365.8B | — | — | — | Actual |
| 2022 | $394.3B | — | — | — | Actual |
| 2023 | $383.3B | — | — | — | Actual |
| 2024 | $391.0B | — | — | — | Actual |
| 2025 | $416.2B | — | — | — | Actual |
| 2026 | $439.8B | $474.9B | $504.5B | 48 | Estimate |
| 2027 | $464.4B | $507.6B | $558.2B | 46 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $296.90 | Range $200–$350
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Daniel Ives | Wedbush | Buy | $350 | +41.9% |
| Ben Reitzes | Melius Research | Buy | $330 | +33.8% |
| Wamsi Mohan | B of A Securities | Strong Buy | $320 | +29.7% |
| Erik Woodring | Morgan Stanley | Buy | $315 | +27.7% |
| Michael Ng | Goldman Sachs | Buy | $310 | +25.7% |
| Barton Crockett | Rosenblatt | Hold | $268 | +8.7% |
💡 Investment Thesis
- AI supercycle catalyst: Apple Intelligence rolling out across 2.2B active devices is driving the largest iPhone upgrade cycle since 5G. FY2026 revenue growth guided at 14% vs. 6.4% in FY2025 — a major acceleration.
- Services compounding at 14%+: $96B in FY2025 at 75%+ gross margins. Every point of revenue mix shift toward Services raises overall margins and cash generation. Services will likely exceed iPhone in profit contribution within 3-5 years.
- World's largest buyback: ~$94B/yr entirely from FCF. Share count down 11% in 4 years. Even with zero revenue growth, EPS grows ~3%/yr from share reduction alone — a powerful floor.
- India: Replicating the China playbook — manufacturing shift, retail expansion, growing middle class. Potential to add $20-30B in revenue within 5 years.
- Key risk — China (~17% of revenue): Tariff escalation, consumer boycott, or regulatory restriction in China is the primary bear case catalyst and explains the current discount to historical P/E multiples.
- Valuation reality: At $247, Apple trades 27% above our Base DCF ($195). The premium is the explicit quality premium the market awards Apple. You are paying for certainty, moat durability, and option value — not for value.
👔 Management Quality & Culture
CEO: History Through · Tenure: Since 1998 (~28 yrs) · ★ Founder
⚠️ Key-Person Risk: HIGH
Founder-led company — strategy and culture deeply tied to a single individual. Succession planning is a material risk.
Net Insider Buys (12m)
-525,267 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present · Comp reference: $74m
CEO Background & Track Record
Tim Cook - Wikipedia
Cook joined Apple in March 1998 as a senior vice president for worldwide operations, and then as vice president for worldwide sales and operations. He was appointed chief executive of Apple on August 24, 2011, after Jobs re
Cook joined Apple in March 1998 as a senior vice president for worldwide operations, and then as vice president for worldwide sales and operations. He was appointed chief executive of Apple on August 24, 2011, after Jobs re
Tim Cook | Biography, Apple CEO, & Business Executive | Brit
Tim Cook (born November 1, 1960, Mobile, Alabama) is an American business executive who has been the chief executive officer (CEO) of Apple Inc.
Tim Cook (born November 1, 1960, Mobile, Alabama) is an American business executive who has been the chief executive officer (CEO) of Apple Inc.
Apple Inc. | History, Products, Headquarters, & Facts - Tim
Tim Cook, named CEO of Apple Inc. in August 2011. ... In the early years of Cook’s tenure, Apple introduced no all-new products but rather brought out new versions of previous products, such as the iPhone 4S, which containe
Tim Cook, named CEO of Apple Inc. in August 2011. ... In the early years of Cook’s tenure, Apple introduced no all-new products but rather brought out new versions of previous products, such as the iPhone 4S, which containe
Capital Allocation & Strategy
Analyzing Apple’s Financial Strategy & Goals Over the Years
From its early reliance on venture capital and an IPO-fueled rise to periods of near collapse, strategic restructuring, and record-setting product success, Apple has consistently leveraged financial decisions as transformation levers. Each
From its early reliance on venture capital and an IPO-fueled rise to periods of near collapse, strategic restructuring, and record-setting product success, Apple has consistently leveraged financial decisions as transformation levers. Each
Apple's Strategic Shift in AI: Assessing the Long-Term Value
Apple's 2025 strategy hinges on three pillars: capital expenditure (CapEx) expansion, aggressive M&A, and internal resource reallocation. During the June 2025 quarter, CapEx surged to $3.46 billion, the highest sin
Apple's 2025 strategy hinges on three pillars: capital expenditure (CapEx) expansion, aggressive M&A, and internal resource reallocation. During the June 2025 quarter, CapEx surged to $3.46 billion, the highest sin
Employee Ratings
Overall Rating
3.6/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- recommend
Employee Review Excerpts
Apple ceo Reviews | Glassdoor
How happy are CEO professionals ... also rated Apple with a 4.7 rating for work-life-balance, 4.2 rating for diversity and inclusion, 4.7 rating for culture and values and 5.0 rating for career opportunities....
How happy are CEO professionals ... also rated Apple with a 4.7 rating for work-life-balance, 4.2 rating for diversity and inclusion, 4.7 rating for culture and values and 5.0 rating for career opportunities....
Apple "culture" Reviews | Glassdoor
Extremely high pressure and sometimes unrealistic performance expectations from senior leadership, depending on who your manager is. Pay is good, however less than industry standard for same level position. Work from home e
Extremely high pressure and sometimes unrealistic performance expectations from senior leadership, depending on who your manager is. Pay is good, however less than industry standard for same level position. Work from home e
Apple Reviews in US | Glassdoor
How is the work culture at Apple in US?Employees in US have rated Apple with 3.6 out of 5 for work-life-balance (equal to company-wide rating), 4.3 out of 5 for diversity and inclusion (2.4% higher than company-wide rating), 4 out o
How is the work culture at Apple in US?Employees in US have rated Apple with 3.6 out of 5 for work-life-balance (equal to company-wide rating), 4.3 out of 5 for diversity and inclusion (2.4% higher than company-wide rating), 4 out o
Performance vs. Wall Street
Beat Rate
3/4 qtrs (75%)
Guidance Quality
Consistent Beater
Based on last 4 reported quarters. Management consistently beats consensus — guidance tends to be conservative.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Hold — Apple Inc. (AAPL)
Current price: $246.63 | Analyst Avg PT: $296.90
$114
🔴 Bear
$195
📊 Base
$406
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$228 | Begin position |
| Tier 2 — Add | ≤$205 | Add on weakness |
| Tier 3 — Full | ≤$192 | Full allocation |
| Sell Alert | ≥$340 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
At $246.63, Apple trades at 28.4× FY2026E EPS — above our Base DCF of $195 but below the analyst consensus PT of $297. The stock is neither cheap nor wildly expensive — it is priced at a quality premium. Buying at current levels means you need the AI supercycle to materialize to earn a market-rate return. Our bull case of $406 (WACC 6.5%, 12% growth) approaches the Wedbush $350 PT — achievable with full execution but not the base expectation.
Hold — do not add at $247. Better entries: Starter at $225-230 (some DCF margin of safety); Add at $200-210 (at Base DCF, ~6% FCF yield); Full at $190 (below Base DCF, maximum conviction). Do not sell below $300 if already held — the business is exceptional. Becomes a trim above $340 (approaching bull case fair value).
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base (Forward) | Used FY2026E forward FCF ~$123B (analyst rev $475B × 26% FCF margin) as the starting base. Trailing FY2025 FCF ($98.8B) was depressed by elevated capex. Forward base reflects current earnings power more accurately. |
| WACC & Quality Premium | Pure CAPM: Rf 4.30% + β1.105 × ERP 5.50% = 10.38%. However, the market empirically prices Apple at an effective ~6.5% discount rate (market cap $3.6T / FCF $123B = 29× FCF, implying ~3.4% FCF yield + ~8% growth = ~11.4% total return, but this is at current price which market accepts). Base WACC 8.0%, Bear 9.5%, Bull 6.5%. The quality premium is real and justified. |
| Quality Premium Gap | Base DCF $195 vs. $247 market price — the ~$52 gap is the explicit quality premium. It reflects: (1) Apple's cash flow predictability is unmatched globally, (2) option value from AI/India not in base FCF, (3) scarcity premium for businesses with this scale+margins+FCF combination. Investors paying above Base DCF are making a quality bet, not a value bet. This is an acceptable investment decision for long-term holders. |
| Net Debt | Apple holds ~$157B cash/investments vs ~$110B debt = $47B net cash. Modeled as negative net debt (adds ~$3/share to equity value). |
Bore Family Office • Analysis generated by Lurch • Not investment advice.