AAPL

Apple remains one of the highest-quality businesses in the market, and the numbers prove it: FY2025 revenue of $416B (+6.4%) flowed into $112B of net income (+19.5%) at a 26.9% net margin and a 32.0% operating margin, with a staggering 151.9% return on equity. The growth mix is healthy where it matters — Services hit $109B (+14%), Mac rebounded (+12%), and even iPhone grew (+4%) on Pro-model strength. The balance sheet returns capital aggressively rather than hoards it: $90.7B of buybacks plus $15.4B of dividends in FY2025 shrank the share count 2.2% and drove diluted EPS up +22.7% to $7.46 — meaningfully faster than net income, which is the engine behind the headline EPS number. The deeply negative retained earnings (-$14.3B) and 3.87x liabilities/equity reflect that capital-return machine, not financial stress; with $35.9B cash and long-term debt actually falling 8.7%, the balance sheet is sound.

The problem is the price, not the business. At $294.30 the stock trades at 39.5x FY diluted EPS and 10.4x sales — a multiple that historically sits well above Apple's own norm and demands accelerating growth that the fundamentals don't show. Revenue compounded just ~3.3% annually from FY2021's $366B to FY2025's $416B; the franchise is durable but mature, and much of the EPS growth is buyback-manufactured rather than organic. Paying ~40x for a high-single-digit topline grower leaves little margin for error.