There's NO Worm In Apple

From Seeking Alpha

This is what we know Wall Street thinks about AAPL:
"Sep-08 FY EPS consensus = $5.14, Sep-09 FY EPS = $6.42."

The thing is, no analyst is including the tsunami of revenue sharing due from iPhone sales and partnerships, which is accruing at a monster rate (currently $1.2 Billion) the earnings from which are amortised out over a period of 24 months on a subscription account scheme.

Apple has the equivalent of an additional 25c earnings in free cash flow, which had it been taken into account would have resulted in Q1 earnings of $2.01 instead of $1.76.
Next quarter, the contribution from this amortised revenue is due to be approx 35c. If you add this in to LAST year's Q2 earnings of 87c, that would already take you to $1.22 EPS - in stark contrast with Apple's guidance of 94c and street expectations of $1.09. And that assumes ZERO ADDITIONAL REVENUES from increased iPod, iTunes, and Mac sales, which should add another 20c in earnings combined.

So for Q2 - for which Apple guided for 94c, they should be able to deliver $1.42.
Apple did a typically über-conservative guidance for Q2, and the stock was train-wrecked by the lynch mob as a result. Apple will earn between $6 - $6.50 this year rather than $5, and approximately $9 in FY09 again the $6.42 expected.
That's why its dirt cheap here: analysts haven't done the math, and the Street can't add up for itself. Had Apple guided realistically instead, the stock would have been closer to $200 today instead of hitting a low of $126.

Knowing this gives you the power and confidence to invest. AAPL is cheaper at $126 relative to its growth than at almost anytime in the last 5 years. Now's the time to buy.