updated 04:45 pm EST, Mon January 3, 2005
Despite Apple stock's strong performance in 2004, Wall Street analysts still have a , according CNN/Money: "According to Thomson/First Call, eleven analysts have Apple rated a 'buy' or 'strong buy' while 12 have it rated a 'hold.' Shares are trading at nearly 44 times fiscal 2005 earnings estimates of $1.49 so they are not cheap. Then again, earnings are expected to more than double this year and grow at an average rate of 20 percent annually for the next few years. And the company does have nearly $14 a share in cash on its balance sheet. If you subtract that, the company's underlying business is trading at about 33 times estimates. That's still pricey but it's more in line with the P/E ratios of hardware companies Dell and Gateway....So if you're a long-term investor, it's hard to find any worms in the Apple story. But investors should realize that the stock could be volatile in the near-term. Expectations for hot new products coming out of Macworld and strong earnings are so high that the slightest disappointment could trigger a violent sell off."