The news of Steve Jobs' death was terribly sad and shocking, but from the market's perspective it was hardly a surprise. Years of declining health and Jobs' resignation as CEO in late August gave Apple investors ample time to reprice shares for a future without his visionary leadership.
Apple's stock remained resilient as traders came to terms with the death of Steve Jobs, the company's iconic co-founder and chairman. After see-sawing through much of Thursday's session, shares in Apple (AAPL) slipped 0.2 percent, or 88 cents, to close at $377.37.
In an otherwise strong day for tech stocks, the technology-focused Nasdaq Composite (COMP) jumped 1.9 percent, or 46 points, to finish at 2,507.
If anything, anxiety over the loss of Steve Jobs has been a drag on Apple's stock at least since he took a medical leave of absence at the beginning of 2011.
Shares in Apple have gained 17 percent for the year to date vs. an 8 percent decline for the S&P 500 (SPX). That sounds great in this market climate, except that based on past performance and price multiples the stock should be up by much, much more.
For the most recent quarter Apple's profit more than doubled year-over-year on revenue growth of greater than 80 percent. And yet the stock trades at just 12 times forward earnings and only 15 times trailing earnings.
Both those multiples are almost 50 percent below Apple's own five-year averages, according to data from Thomson Reuters. That suggests the stock is a bargain at these levels with plenty of upside ahead.
Wall Street analysts certainly concur. Their median price target for Apple stands at $500 a share, according to Thomson Reuters data, implying the stock should rise 33 percent in the next 12 months or so. Analysts' average recommendation, meanwhile, remains firmly at Buy.
"Apple remains a top [stock] pick," writes Canaccord Genuity analyst T. Michael Walkley in Thursday note to clients. "We continue to anticipate strong earnings growth for Apple over the next several years with very strong demand and relatively low global market penetration for iPhone, iPad and Mac products."
As for Jobs' successor Tim Cook, he is "well qualified for his new role as CEO," the analyst says, with a "deep and talented executive team" at his disposal.
With the uncertainty surrounding Steve Jobs now lifted, the market can return to focusing on Apple's strong fundamentals and future -- one in which Jobs' legacy will live on, writes Sterne Agee analyst Shaw Wu.
"Apple is [Jobs'] legacy just like Disney is Walt Disney's and GE for Thomas Edison," Wu says. "It is the culture of innovation, thinking different, risk taking and execution that will live on. His impact will still be felt in the decades to come."
More on MoneyWatch:
- Apple After Steve Jobs: A Legacy of Success
- Steve Jobs Remembered
- Apple's Stock Falls on iPhone Fail but It's Still a Bargain