Apple Inc. (AAPL) Valuation

Apple needs no introduction. AAPL is widely owned by both go-go tech momentum investors and Berkshire Hathaway. What is it worth? Data is from Value Line, including growth rates. I've put together six scenarios:

scenario	base EPS	grow rate	grow dura.	growth rate from peak	dura. of post peak	disc rate	share value
2020 basis	$3.28	14.5%	12	-10%	8	5%	$111
2021e basis	$4.50	14.5%	12	-10%	8	5%	$152
market price	$4.50	14.5%	10	-7%	8	5%	$126
sharp obsol	$4.50	14.5%	8	-12%	8	5%	$89
nominal	$3.89	14.5%	8	5%	7	5%	$101
nomin, opt	$4.50	13.0%	14	-8%	8	5%	$171

Earnings are expected to rise sharply in '21 relative to '20, so I've included valuations from both bases for comparison. Since it is already May 2021, the nominal case blends the two. 

The challenge with valuing high tech is that trends do not last. When the nature of your business is disruption, you are subject to being disrupted by technology from other companies. That's why the sharp obsolescence case and nominal case use a growth trend of only eight years. I can hear people arguing about why the short durations are wrong. May I point out that 14 years is the same number of years since the introduction of the iPhone? If the argument is that the product is compelling to all of the people who already own it, that argues for stability, rather than growth. 

You can make other arguments that the iPhone user interface is an unusual sweet spot that will lead to loyal and extended adoption of Apple products for a long time. I've tried to reflect that in the numbers. In fact, the nominal case assumes that the post-peak period is a growth period, rather than the usual shrinkage. 

The story here is that AAPL's market price reflects a widespread understanding of its potential future discounted cash flow. There is no mismatch. Of course, it's so widely followed, why would there be a mismatch?