Andy Zaky on Apple’s P/E Ratio
[Via Daring Fireball]
Andy Zaky makes the case that Apple’s stock is anything but a Wall Street darling:
Yet, when we see Google (GOOG) report 17% earnings growth and trade a 20 P/E ratio and then watch Apple report 92% earnings growth and trade at a 16 P/E ratio, how in the hell can anyone say that Apple is treated as a darling? Amazon (AMZN) missed earnings expectation for the third time in five quarters, and grew at a far lower growth rate than Apple on both the top and bottom line and trades at a 90 P/E ratio. Netflix (NFLX) also missed expectations, grew at a far lower growth rate than Apple on both the top and bottom line and trades at a 70.58 P/E ratio.
So much for Wall Street being rational. The P/E ratio is supposed to be a measure of future growth.
Growth does not match what it should. I wonder why.