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Let's see what those numbers can tell us about how expensive or cheap Apple might be.

Apple has a P/E ratio of 14.5 and an EV/FCF ratio of 10.5 over the trailing 12 months. If we stretch and compare current valuations with the five-year averages for earnings and free cash flow, we see that Apple has a P/E ratio of 32.4 and a five-year EV/FCF ratio of 24.2.


Numerically, we've seen how Apple's valuation rates on both an absolute and relative basis. Next, let's examine ...

In the past five years, Apple's net income margin has ranged from 14.2% to 23.9%. In that same time frame, unlevered free cash flow margin has ranged from 19.3% to 30.7%. 

In addition, over the past five years, Apple has tallied up five years of positive earnings and five years of positive free cash flow.


Let's start by seeing what this company's done over the past five years. In that time period, Apple has put up past EPS growth rates of 64.9%. Meanwhile, Wall Street's analysts expect future growth rates of 20.3%.

Here's how Apple compares with its peers for trailing-five-year growth: Source: S&P Capital IQ; EPS growth shown. 

The pile of numbers we've plowed through has shown us the price multiples that shares of Apple are trading at, the volatility of its operational performance, and what kind of growth profile it has -- both on an absolute and a relative basis.

The more consistent a company's performance has been and the more growth we can expect, the more we should be willing to pay. We've gone well beyond looking at a 14.5 P/E ratio, and we see some amazing numbers. Sure, its five-year price multiples are high, but that's because of its ridiculous growth. Apple is a very rare breed right now -- a large-cap growth stock selling for value-investing price multiples. Apple's been able to create a high-margin ecosystem that builds a kind of in-network traction (if you own an iPhone, you're probably more likely to consider an iPad or a Mac). But the bigger they are, the harder they could fall. A combination of competition and a post-Jobs dropoff in innovation are the big threats to Apple. As for me, I continue to hold my shares. If you find Apple's numbers or story compelling, don't stop here. Continue your due-diligence process until you're confident one way or the other. As a start, add it to My Watchlist to find all of our Foolish analysis.

You can also see the stocks that I've researched beyond the initial numbers and bought in my public real-money portfolio. 

Is Apple's Stock Cheap by the Numbers? @themotleyfool #stocks $GOOGL, $MSFT, $HPQ, $AAPL