Apple 2.0

Covering the business that Steve Jobs built

Apple as a coiled spring

June 13, 2011: 10:44 AM ET

What investors want to know is whether its stock will ever pop

Source: Jeff Fosberg, AFB

The investors who follow the ups and downs of Apple's (AAPL) share price on The Mac Observer's Apple Finance Board often look with a mixture of envy and dismay at the price-to-earnings ratios of Amazon (81) and Netflix (76). Apple, by comparison, seems downright cheap with a trailing P/E of 15.57.

Yet Amazon (AMZN) and Netflix (NFLX) are trading very close to their respective price targets as reported by Thomson Reuters. Apple by contrast, is nowhere near its consensus target of $450.

It's a situation Jeff Fosberg, who posts on AFB as Mercel, interprets optimistically in the chart above. As he sees it, Apple's share price is a coiled spring, ready to pop like a Jack in the Box.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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