Is Apple Computer Really Worth Six Times General Motors?



With the recent run-up on Apple Computer stock, and the collapse of General Motors stock, I had the hare-brained idea of comparing the two companies.

As of this writing, Apple's stock price is $79.69, which gives it a market cap of $67.16 billion.
And GM's stock price, as of the moment, is $20.22, giving it a market cap of $11.43 billion.

The problem with the current valuation of Apple and GM is illustrated by their respective revenue statements, for the one year period ending on Sept. 30, 2005:

Total net sales for General Motors for that period: $ 193.5 billion.
Total net sales for Apple Computer for that period: $ 13.9 billion

So, in terms of revenue, General Motors is nearly 14 times the size of Apple Computer. But in terms of stock market valuation, Apple Computer is six times more valuable than General Motors.

Does this make any sense?

Posted: Thu - January 19, 2006 at 02:37 PM        

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