Those words of Charles Dickens as he opened
his Tale
of Two Cities seem apt in describing the stock market reaction to the
latest quarterly reports from Apple and Amazon.
Apple’s EPS of $13.81 exceeded consensus
forecast of $13.57 by 1.8%, yet the stock declined 12.4% the next day. In contrast,
Amazon’s EPS of $0.21 fell 25% short of consensus forecast of $0.28, yet the
stock increased 4.8% the next day. Hardly
seems fair.
Here are the specific financial stats for the
two companies:
|
Apple
|
Amazon
|
|
|
Date of quarterly
Earnings Report
|
1/23/13
|
1/29/13
|
|
Analyst EPS Consensus
(last quarter)
|
$13.57
|
$0.28
|
|
Reported EPS (last
quarter)
|
$13.81
|
$0.21
|
|
EPS % difference from
Analyst Consensus
|
1.8%
|
-25.0%
|
|
% Change in Stock Price
next day
|
-12.4%
|
4.8%
|
|
Market Cap
|
$427.5 B
|
$120.5 B
|
|
Revenue (TTM)
|
$165 B
|
$61 B
|
|
Net Income (TTM)
|
$41,750 M
|
-$39 M
|
|
Cash
|
$39.8 B
|
$44.5 B
|
|
Free Cash Flow (TTM)
|
$21.1 B
|
$3.1 B
|
|
EPS Diluted Quarterly YoY
Growth
|
-0.43
|
-42.1%
|
In terms of market valuations, below is how
the two companies compare on various ratios of performance, with the right
column being what Apple would be worth (in billions) if it were valued at
Amazon’s ratios:
|
Apple
|
Amazon
|
Apple
Market Cap at Amazon ratio
|
|
|
PE (TTM)
|
10.3
|
negative
|
NMF
|
|
PE (Current price/past
ten years earnings)
|
36.5
|
237
|
$2,777
B
|
|
Price/Book Value
|
3.6
|
14.7
|
$1,746
B
|
|
Dividend Yield
|
2.3%
|
0.0%
|
NMF
|
|
Debt-to-Equity Ratio
|
0.00
|
0.38
|
NMF
|
|
Return on Assets
|
25.3%
|
-0.16%
|
NMF
|
|
Return on Equity
|
38.0%
|
-0.51%
|
NMF
|
|
Earnings Yield
|
9.7%
|
0.03%
|
$138,228
B
|
|
Price/Sales ratio TTM
|
2.6
|
2.0
|
$329 B
|
|
Price/Book Value
|
3.4
|
14.7
|
$1,848 B
|
|
EV/Revenues (TTM)
|
2.5
|
1.9
|
$325 B
|
|
EV/EBITDA (TTM)
|
6.9
|
40.7
|
$2,519
B
|
|
EV/EBIT (TTM)
|
7.5
|
170.5
|
$9,719
B
|
|
Operating PE Ratio (TTM)
|
7.8
|
177.6
|
$9,734
B
|
|
Operating Earnings Yield
|
12.9%
|
0.56%
|
$9,848
B
|
While $138 trillion seems a bit rich for even
Apple, it is interesting how many of the ratios show an Apple value in the
trillions using the Amazon ratios. And all of them other than Price-to-Sales
are higher than Apple’s current $428 B valuation.
