Apple Products/Services SOTP

Apple Inc. (AAPL)
By@grokius
Assumptions as of 2026-08-26
USD
Updated Aug 26, 2026 · Revised 1 time
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Apple Products/Services SOTP

Sum-of-parts on FY2027E GAAP EBIT split between Products and Services. Each segment's EBIT is gross profit minus opex allocated by revenue. Products is capitalized at a hardware EV/EBIT; Services at a software-like EV/EBIT; net cash is added. This is not an Intel/Micron through-cycle FCF yield, not a bank P/TBV, not a chemicals EV/EBITDA, not SharkNinja Adj. EBITDA, not STIM EV/Sales, not AMD FY27 EPS, and not NVIDIA NTM nGAAP P/E. Apple discloses Products vs Services sales and gross margin, reports GAAP, and Services is about half of EBIT on about a quarter of sales. iPhone 17 / Siri AI / Ternus CEO transition are the 2026 overlay, not the valuation identity.

as of 2026-08-26

Fair value per share
$312.62
Upside/downside
-7.1%
FY2027E GAAP EPS
$9.62
FY2027E EBIT
166.8
FY2027E EBITDA
180.3
FY2027E free cash flow
143.3
Products EBIT
83.6
Services EBIT
83.2
Services share of EBIT
49.9%
Implied equity value
4564.2
Implied EV/EBIT
27.0
Market EV/FY27E EBIT
29.1
FY27E FCF yield at implied equity
3.1%

Capital structure

14.60billions
62.2$B

Earnings

13.5$B
102%
1.4$B
16.5%

Market

$336.64$/share
Latest AAPL quote · updated Oct 9, 2026 2:00 PM MDT

Operating

78.0$B
375$B
138$B
37.5%
75.5%

Valuation

22.0
32.0

Sources

  1. Q3 FY2026 (ended 27 Jun 2026): revenue $109.417B (+16% y/y), Products $78.678B, Services $30.739B; iPhone $54.252B (+22%), Mac $10.352B (+29%), iPad $6.191B, Wearables $7.883B. Gross margin 50.1% including ~2pp tariff refunds (Products GM 40.1% / Services 75.6%). Operating income $35.695B, net income $29.789B, diluted EPS $2.02 including $0.11 tariff-refund benefit. Diluted shares 14,714.676 million. — sec.gov (accessed 2026-08-26)
  2. Q3 FY2026 10-Q: cash and cash equivalents $39.544B, ST marketable securities $22.855B, LT marketable securities $84.118B (cash+securities $146.517B); commercial paper $1.997B, current term debt $11.007B, non-current term debt $71.340B (total debt $84.344B); net cash ~$62.2B. Shares issued and outstanding 14,608.963 million. Nine-month CFO $116.996B, capex $6.799B, FCF $110.197B; buybacks $62.094B; dividend $0.27 payable 13 Aug 2026. — sec.gov (accessed 2026-08-26)
  3. Q2 FY2026 (ended 28 Mar 2026): revenue $111.184B (+17%), Products $80.208B, Services $30.976B, iPhone $56.994B, diluted EPS $2.01, net income $29.578B, diluted shares 14,725.873 million. — sec.gov (accessed 2026-08-26)
  4. FY2025 10-K (ended 27 Sep 2025): revenue $416.161B (iPhone $209.586B, Services $109.158B), Products GM 36.8%, Services GM 75.4%, opex $62.151B, operating income $133.050B, net income $112.010B, diluted EPS $7.46 on 15,004.697 million shares. CFO $111.482B, capex $12.715B, buybacks $90.711B. — sec.gov (accessed 2026-08-26)
  5. Q3 FY2026 call: September-quarter revenue +9-11% y/y including 2.5pp sequential FX headwind and rising supply constraints on iPhone/Mac/iPad; iPhone mid-teens y/y; Services y/y growth largely similar to June after removing the 2.5pp sequential FX hit; GM 47-48% including ~1pp tariff-refund benefit; opex $19.1-19.4B; OIE ~$350M; tax ~16.5%. Installed base >2.5B active devices; paid subscriptions >1.5B. Q3 opex $19.1B (+23% y/y) on R&D. Cash $147B and debt $84B; $33B returned in the quarter ($25.8B buybacks). Tim Cook's final earnings call; John Ternus incoming CEO. — fool.com (accessed 2026-08-26)
  6. Company Q3 newsroom: June-quarter records for revenue and EPS; tariff refunds ~2pp of GM and $0.11 of EPS; WWDC26 all-new Siri AI; dividend $0.27. — apple.com (accessed 2026-08-26)
  7. CNBC Q3 recap: iPhone $54.25B vs $53.86B est; Services $30.74B vs $31.22B est (miss); Mac $10.35B beat; Q4 growth guide 9-11% vs ~12% Street; stock down >6% after hours on supply-constrained guide. — cnbc.com (accessed 2026-08-26)
  8. Street as of late Aug 2026: FY2026E EPS ~$8.80 and FY2027E ~$9.54 (WSJ/MarketWatch); average 12-month price target about $326-$337 (StockAnalysis $326.34 from 45 analysts, median $335; VCP Scanner $337.43 from 111). BofA $380 (20 Aug 2026); Redburn upgraded to $400 (17 Aug); Jefferies cut to $264 (10 Aug). — stockanalysis.com (accessed 2026-08-26)
  9. 8-K 19 Apr 2026: Tim Cook transitions to Executive Chair; John Ternus named CEO (effective 1 Sep 2026). — sec.gov (accessed 2026-08-26)
  10. Independent Aug 2026 writeups frame Apple as an asset-light AI compounder versus hyperscaler capex, with Services as the multiple engine and Siri AI as the option; 24/7 Wall St. $359 target; Seeking Alpha notes ~31x earnings is not cheap into memory-cost risk. — 247wallst.com (accessed 2026-08-26)

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