Apple vs. Alphabet vs. Meta: Which Tech Stock Is The Best Value?

The Street2023-02-14

Not long ago, the Apple Maven published a comparison between Apple stock and two of its tech peers: Microsoft and Amazon.Now, we turn to the other two FAAMG peers and ask the same question: is AAPL a ...

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Comments

JQC
2023-02-14
JQC
Ok
Chrissimo
2023-02-14
Chrissimo
It's really depends on your investment strategies. Day traders love flutuations, thats how they make money. Long term trader love growth over time. The author mentioned economic downturn but remember economy has It's cycles too, what goes down must come up! There will be time when these stock will sore and stay up for many years before the economy hits another downturn cycle. Like I said, it's all depebds on YOUR investment strategies. Happy trading!
- OneC:
  k
- ericbqlee:
  🙂
- Birdiebrog:
  J
- Hafiz222888:
  ok
- Martin8888:
  👍
Longs
2023-02-14
Longs
👌🏼🙏🏼
Chrissimo
2023-02-14
Chrissimo
Now this is a proper analyzed prognosis. I agreed that APPL is a riskier long term and I fell Apple will have to innovate a bit more, their product lines are getting old. Whereas their competitors are innovating heavily. Apple long term strategies remain to be seen.
V.lye
2023-02-14
V.lye
Ok
Andrewinho
2023-02-14
Andrewinho
All great business!! 🤭🤭🤭

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But are we missing something?AAPL: Barely A Value StockAs a recap, we observed last time that Apple stock had the lowest P/E (price-to-earnings ratio) of the three names that we compared, including AMZN and MSFT, at a current-year multiple that has now come down slightly to 25.1x.Despite the relatively low earnings ratio, I think AAPL can hardly be considered a value stock. Once growth (measured by estimated EPS increase in the next five years) and risk (measured by the stock’s beta) are considered, Apple seemed to offer the least value of the three.Let’s see today how AAPL fares against GOOG and META using the same metrics and analysis methodology.GOOG And META: Cheaper On The SurfaceBased on data from Yahoo Finance, Alphabet stock trades at a 2023 P/E of only 18.9x. The fact that the share price has been down 37% from the highs of late 2021 helps to explain the sub-20 earnings multiple.Not to be outdone, Meta stock trades at an even lower current-year P/E of 18.4x. While shares have been undergoing a massive rally so far this year, the stock remains in a very uncomfortable position, down 54% from the all-time high.So, at first glance, peers GOOG and META seem to be better-value stocks than AAPL based on P/E alone – exactly the opposite conclusion that we reached when we compared AAPL to AMZN and MSFT, a few days ago.But it’s time to dig deeper into the fundamentals to understand if Apple stock’s higher P/E relative to its peers is justified.Apple Falls Behind On GrowthAs a reminder, the two main factors that determine how richly a stock deserves to trade are (1) growth prospects and (2) investment risk.According to YCharts, Apple is expected to grow EPS by 11.0% annually over the next five years. This isn’t a bad number at all, considering the massive size of the Cupertino company and the modest-growth prospects of product categories like PCs and tablets.But both Alphabet and Meta can do better.The Mountain View-based web search giant is projected to grow earnings at an impressive pace of 17.2% per year. This means that GOOG’s PEG, or P/E over growth ratio, is a very appealing 1.1x. This is about as low as this multiple gets in the mega-cap tech world.Meta falls a bit behind Alphabet since the Menlo Park-based social media behemoth is forecasted to grow EPS by 11.3% annually. Still, Meta stock’s PEG of 1.6x is quite a bit lower than AAPL’s 2.3x.Apple: The Riskiest?In our last article, I explained that risk is probably the most complex variable to assess in this exercise. While a stock’s beta is often used as a proxy for risk, I noted:“Which factor best captures risk? Is it the balance sheet composition (e.g., cash and debt), or is it the capital structure? Is it the predictability of revenues and the consistency of margins? Or should the assessment be qualitative?”Apple’s beta of 1.28 is the highest of the three, which is not a good thing – a high beta means more sensitivity to market moves, hence higher risk. Alphabet’s 1.09 is the lowest, while Meta’s 1.20 sits between the two.Based on the standard metrics, therefore, AAPL is the clear loser in the faceoff against the internet giants: highest P/E, lowest EPS growth projections, and higher beta.So: sell AAPL, buy GOOG and META? Not so fast.The Analysis Gets Interesting…For starters, Apple’s earnings growth opportunities could be understated, considering the company’s imminent entries in the AR/VR and driverless vehicle spaces. But growth debates aside, I think that risk is the trickiest factor to analyze.It may be overly simplistic to equate risk with beta. First, beta is a backward-looking metric that, in this case, considers the share price movements over the past five years. In the past twelve months, for example, META has been about twice as volatile as both AAPL and GOOG, hence historically riskier.But even more importantly, a qualitative look at things may make sense at this point.Apple’s business model is the most diversified. Despite the dependence on the iPhone (over 50% of total revenues), the Cupertino company also runs a highly profitable services business (about 40% of total operating profit) that benefits from an installed base of 2 billion devices.Meanwhile, Alphabet and Meta are much more heavily reliant on advertising spending. This business is highly cyclical, which means that financial results could be underwhelming, if not worse, during times of economic distress.Then, there is the whole debate of artificial intelligence (AI). As Microsoft seriously challenges Alphabet in search and browsing with ChatGPT, it may be dangerous to bet heavily on a stock like GOOG, even at today’s low valuations.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9954648693,"gmtCreate":1676349002413,"gmtModify":1676349005769,"author":{"id":"4106387998711340","authorId":"4106387998711340","name":"JQC","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"authorIdStr":"4106387998711340","idStr":"4106387998711340"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9954648693","repostId":1188853980,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9954655941,"gmtCreate":1676344558183,"gmtModify":1676344563361,"author":{"id":"4131314249442152","authorId":"4131314249442152","name":"Chrissimo","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"4131314249442152","idStr":"4131314249442152"},"htmlText":"It's really depends on your investment strategies. Day traders love flutuations, thats how they make money. Long term trader love growth over time. The author mentioned economic downturn but remember economy has It's cycles too, what goes down must come up! There will be time when these stock will sore and stay up for many years before the economy hits another downturn cycle. Like I said, it's all depebds on YOUR investment strategies. Happy trading!","listText":"It's really depends on your investment strategies. Day traders love flutuations, thats how they make money. Long term trader love growth over time. The author mentioned economic downturn but remember economy has It's cycles too, what goes down must come up! There will be time when these stock will sore and stay up for many years before the economy hits another downturn cycle. Like I said, it's all depebds on YOUR investment strategies. Happy trading!","text":"It's really depends on your investment strategies. Day traders love flutuations, thats how they make money. Long term trader love growth over time. The author mentioned economic downturn but remember economy has It's cycles too, what goes down must come up! There will be time when these stock will sore and stay up for many years before the economy hits another downturn cycle. Like I said, it's all depebds on YOUR investment strategies. Happy trading!","images":[],"top":1,"highlighted":2,"essential":1,"paper":1,"likeSize":19,"commentSize":12,"repostSize":0,"link":"https://ttm.financial/post/9954655941","repostId":1188853980,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":105791721,"gmtCreate":1676345077590,"gmtModify":1676345080886,"authorId":3578860398815388,"author":{"id":3578860398815388,"idStr":"3578860398815388","authorId":3578860398815388,"name":"OneC","avatar":"https://static.tigerbbs.com/d79efe8cb40ab89cc73afcebf2a58e77","vip":1,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9954655941,"type":1,"supId":0,"prevId":0,"content":"<u>k</u>","text":"<u>k</u>","html":"<u>k</u>"},{"id":105791717,"gmtCreate":1676345051214,"gmtModify":1676345079520,"authorId":4101424154342900,"author":{"id":4101424154342900,"idStr":"4101424154342900","authorId":4101424154342900,"name":"ericbqlee","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9954655941,"type":1,"supId":0,"prevId":0,"content":"🙂","text":"🙂","html":"🙂"},{"id":105791715,"gmtCreate":1676345038414,"gmtModify":1676345064500,"authorId":3573736892864540,"author":{"id":3573736892864540,"idStr":"3573736892864540","authorId":3573736892864540,"name":"Birdiebrog","avatar":"https://static.tigerbbs.com/9a217e800cf26e2e49dc4d6354848a33","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9954655941,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">J</span>","text":"<span class=\"s1\">J</span>","html":"<span class=\"s1\">J</span>"},{"id":105791710,"gmtCreate":1676345023393,"gmtModify":1676345026570,"authorId":4099735834895830,"author":{"id":4099735834895830,"idStr":"4099735834895830","authorId":4099735834895830,"name":"Hafiz222888","avatar":"https://static.tigerbbs.com/0a664884d32e9311fbe5ee8ba4aed228","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9954655941,"type":1,"supId":0,"prevId":0,"content":"ok","text":"ok","html":"ok"},{"id":105791700,"gmtCreate":1676344993025,"gmtModify":1676345020087,"authorId":4093914663006090,"author":{"id":4093914663006090,"idStr":"4093914663006090","authorId":4093914663006090,"name":"Martin8888","avatar":"https://static.tigerbbs.com/1eac782f65d8d1401a7e7334c082d2bf","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9954655941,"type":1,"supId":0,"prevId":0,"content":"👍","text":"👍","html":"👍"}],"langContent":"EN"},{"id":9954652677,"gmtCreate":1676344455799,"gmtModify":1676344459843,"author":{"id":"4115290449563752","authorId":"4115290449563752","name":"Longs","avatar":"https://community-static.tradeup.com/news/824b5073731ab909a8d4e129caa8d995","vip":1,"crmLevel":6,"crmLevelSwitch":0,"authorIdStr":"4115290449563752","idStr":"4115290449563752"},"htmlText":"👌🏼🙏🏼","listText":"👌🏼🙏🏼","text":"👌🏼🙏🏼","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9954652677","repostId":1188853980,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9954656535,"gmtCreate":1676344243928,"gmtModify":1676344248883,"author":{"id":"4131314249442152","authorId":"4131314249442152","name":"Chrissimo","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"4131314249442152","idStr":"4131314249442152"},"htmlText":"Now this is a proper analyzed prognosis. I agreed that APPL is a riskier long term and I fell Apple will have to innovate a bit more, their product lines are getting old. Whereas their competitors are innovating heavily. Apple long term strategies remain to be seen.","listText":"Now this is a proper analyzed prognosis. I agreed that APPL is a riskier long term and I fell Apple will have to innovate a bit more, their product lines are getting old. Whereas their competitors are innovating heavily. Apple long term strategies remain to be seen.","text":"Now this is a proper analyzed prognosis. I agreed that APPL is a riskier long term and I fell Apple will have to innovate a bit more, their product lines are getting old. Whereas their competitors are innovating heavily. Apple long term strategies remain to be seen.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9954656535","repostId":1188853980,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9954627060,"gmtCreate":1676340311251,"gmtModify":1676340314620,"author":{"id":"4088902048392220","authorId":"4088902048392220","name":"V.lye","avatar":"https://static.tigerbbs.com/7233306780623a2802ebfc0893c0cc52","vip":1,"crmLevel":5,"crmLevelSwitch":1,"authorIdStr":"4088902048392220","idStr":"4088902048392220"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9954627060","repostId":1188853980,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9954625572,"gmtCreate":1676339150597,"gmtModify":1676339154417,"author":{"id":"3581563418944392","authorId":"3581563418944392","name":"Andrewinho","avatar":"https://static.tigerbbs.com/3127e2bc40ab23064a5187a00a63e19b","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3581563418944392","idStr":"3581563418944392"},"htmlText":"All great business!! 🤭🤭🤭","listText":"All great business!! 🤭🤭🤭","text":"All great business!! 🤭🤭🤭","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9954625572","repostId":1188853980,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":59,"commentSize":6,"repostSize":0,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1188853980"}