I recently read that one of the reasons that Apple stock may only be trading at 12x forward earnings is because they don’t have a model with recurring revenues. they get all their positive cash flow by acquisition.
Hmmm…if what they are saying is that because apple doesn’t really sell software (or hardware) on some sort of a subscription model, I can see that.
But what if you owned a company that by its very nature sells to both the same people and newly acquired people in a model that includes selling hardware (and the associated software) to people AS IF they were on a subscription model. Every 2 years a new phone. Every year a new iPad. Every 3 years a new mac. Every month an album or a movie. I wonder if we rethought their product turnover as essentially a non-binding subscription model.
Do you think that the Forward PE would be different? higher?