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Apple Inc. (AAPL) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Apple Inc. (AAPL)

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Intrinsic Value (DCF)

Current$260.25
→
Intrinsic$246.19
-5%
$152.42$246.19$472.75
Market implies 19% growth for 5 years
AAPL appears fairly valued — current price aligns with our DCF estimate.
At $260, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $152 → Bull $473. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →14%16%18%20%
6%$354$385$418$454
8%$209$227$246$267
10%$146$159$172$186
12%$112$121$131$141

Bull Case

  • Bull case ($473) offers 82% upside at 21% growth, 7% discount

Bear Case

  • Bear case ($152) implies 41% downside at 14% growth, 10% discount
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5-Year Free Cash Flow Projection

Year 1$116.41B
Year 2$137.20B
Year 3$161.71B
Year 4$190.59B
Year 5$224.63B
Terminal$4.58T

📐 Model Inputs

Growth Rate17.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate8.1%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$98.77BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is AAPL stock undervalued or overvalued?
🔴 OVERVALUED

AAPL trades at $260.25 vs. our DCF-derived intrinsic value of $193.18, implying -26% downside. Using a 8.1% WACC and 17.9% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($309.25) suggests limited upside.

What is AAPL's intrinsic value?

Using a 5-year DCF model: Base FCF of $98.77B, projected at 17.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 8.1% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $62.72B net debt and dividing by 15.00B shares: Bear $122.55 | Base $193.18 | Bull $309.25. Current price $260.25 implies -26% to base case.

How is AAPL's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=8.1%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($2961.30B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 30.0x.