Whether Apple Inc. (NASDAQ:AAPL) is a growth stock or not has been up for debate lately, with some analysts siding with CEO Tim Cook. Those at Bernstein Research, however, disagree. They looked at the growth trajectory of the iPad and determined that even with a new product category, Apple has simply gone beyond being a growth stock.

Apple Stock AAPL

Why it isn’t realistic for Apple to be a growth stock

Analysts, Toni Sacconaghi, Jonathan Cofsky and Eric Garfunkel note that Apple Inc. (NASDAQ:AAPL)’s revenue base is now $170 billion. In fact, the company’s revenues rose by $9.3 billion year over year in the 2013 calendar year. That’s the third most of any technology company in the U.S. and the fifth highest in its history. Apple’s revenue growth was 6%, and its stock also underperformed the market by 24% during the year.

They note that Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) were the only two companies to see their year over year revenues grow faster than Apple’s, and that growth was only modestly more. Google reported $9.7 billion in growth, while Microsoft’s revenue grew by $10.5 billion.

Considering the iPad

The Bernstein team also notes that many investors hold the iPad as an example of how Apple Inc. (NASDAQ:AAPL) is able to innovate and why they still expect great things out of the company. After all, the iPad went from $0 in revenue in the 2009 fiscal year to more than $30 billion in 2012. In addition, Apple sees $33 billion in annual revenues from the iPad alone—much higher than the total revenues of many other companies, like EMC Corporation (NYSE:EMC), Xerox Corporation (NYSE:XRX), QUALCOMM, Inc. (NASDAQ:QCOM) and others.

In the first four quarters it was available, the iPad generated $12 billion in revenues, and it enjoyed an “unprecedented” ramp-up in adoption. It boosted Apple’s revenue growth rate by 800 basis points in the 2010 fiscal year, 2,200 basis points the following year and 1,110 basis points in 2012.

Why the iPad doesn’t really provide a clue

Bernstein analysts note that today, Apple Inc. (NASDAQ:AAPL) rakes in four times the revenues it did when it introduced the iPad. This means that even if the company does create another business which ends up being as big as the iPad, the impact would be far more modest than it was when the iPad was introduced.

This chart created by the Bernstein team illustrates their point:

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As you can see, if the new product has the same revenue trajectory as the iPad, Apple Inc. (NASDAQ:AAPL) would only enjoy 3% growth in the first year and 8% growth the following year. That’s significantly lower than the 12% first-year growth and 22% second-year growth from the iPad in 2010 and 2011. The analysts do note that while a new product would improve Apple’s revenue growth, it probably won’t be enough to make the company a growth stock, especially since margins on a new product will probably be lower than the company average, which would imply a lower boost to earnings per share.

Apple still rated Outperform

They still have an Outperform rating and a $575 per share price target on Apple Inc. (NASDAQ:AAPL), but they see the company as “a trading stock” rather than a growth stock. They say it’s hard to “have conviction” that Apple will see higher net income and cash flow in three to five years ago compared to what it has today.

The products they do see as potentially having a positive effect—if they ever see the light of day—include a “a converged tablet-notebook device” and an iPhone which is priced lower than $300. They see opportunities from an iWatch, iTV and monetization of the installed base of iOS users through search, advertising, payments or other avenues as being “much more limited.”

Shares of Apple Inc. (NASDAQ:AAPL) rose more than 1% in intra-day trading.