Oppenheim

Is Apple the Rodney Dangerfield of tech companies?

January 3, 2011: 7:57 AM ET

One of Wall Street's better analysts wonders why the stock don't get no respect

Photo: Jim Accordino via Wikimedia Commons

"Why does the market dislike Apple?" asks Oppenheim's Yair Reiner in a note to clients issued Monday. "It typically grants companies with 70% EPS growth and plenty of runway a premium valuation. Apple is valued at 14x (ex-cash)—like the S&P."

Reiner had earlier raised, and dismissed, the possibility that Apple's (AAPL) market cap -- at $295.89 billion the highest of any tech company -- might be scaring buyers away.

More likely, he says, is that with Google's (GOOG) Android grabbing market share, investors are secretly worried that Apple won't be able to sustain the iPhone's "all-important" price premium.

"If so," he concludes, "the more lasting consequence of an Apple-Verizon deal won't be the number of incremental iPhones sold, but that the scale of competition between iPhone and Android could tip sharply in Apple's favor. If so, Apple's earnings won't just rise from the additional Verizon units—they'll finally get some respect."

There is another possibility.

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