Apple is Overvalued

As I stated before, I think the recent rise in Apple’s stock is way too much. Barron’s wrote this over the weekend, via Briefing.com:.

Despite Apple’s recent run-up in price in conjunction with the intro of iTunes, concerns over valuations still persist — Barron’s (18.32)

The article cites concerns over the co’s recent stock price appreciation in light of the response from its iTunes online music store. Apple’s valuations currently suggest its trading at approximately 70 times forward earnings. In addition, interest income is projected to represent all of the current year’s profits and a significant piece of next year’s as well. Concerns continue to be cited over the lack of growth in its core computer business. The article suggests the co has two choices of either finding a way to profitability with its hardware business or utilize its cash to purchase related services like iTune and iPod.

Disclosure: I’m short Apple.