Apple shares appear to have hit bottom on Thursday as they’re starting to recover today, heading back toward $100. But will they manage to surpass the century mark? The stock is up 2.56% at $98.91 as of this writing, and one analyst says Apple’s valuation is simply absurd.

Apple Inc. Valuation Now At "The Point Of Absurdity": Analyst

Apple Monitor Misses

Apple has been getting killed for another report indicating that it has again cut iPhone orders in its supply chain, and now there are more data points indicating that the skidding sales continue. Drexel Hamilton analyst and noted bull Brian White said in a report dated Jan. 8 that his Apple Monitor again missed typical seasonality in December.

He said that all of the companies in his basket of Taiwanese suppliers reported much weaker than average sales for December. He’s not worried though.

“In our view, no matter how challenging trends are in the near term, we believe Apple’s valuation has reached the point of absurdity at just under 7x our CY:16 EPS estimate (ex-cash),” he wrote. “Even if our CY:16 EPS estimates were cut by 30%, the stock would still only be trading at less than 10x our CY:16 EPS projection (ex-cash),” he added.

Taiwanese supplier sales tumble 31% in December

White said all the companies in his Apple Monitor having reported their December sales, he found a 31% month over month decline, which is far less than the average 9% decline over the last decade. Further, in December 2014, sales in the monitor only declined 3% month over month.

He does note though that last year production of the iPhone 6 Plus was delayed, thus hurting the supply chain early in the ramp but boosting sales later in the quarter. He added that this year both iPhone lineups saw healthy yields.

Apple guided for weak December quarter

Looking at December’s sales, he found a 7% sequential increase for the fourth calendar quarter, which was far less the 20% average increase over the last decade. Last year in the December quarter, sales in the monitor climbed 2% sequentially. He reminded investors that Apple’s guidance for the December quarter already indicated seasonality that’s weaker than the average. The iPhone maker projected a 47% to 50% sequential increase in sales. Last year Apple recorded a 77% sequential increase.

White added that key supplier Hon Hai Precision saw a 21% month over month decline in sales for December, which was far below the 3% average increase. On the other hand though, for the full December quarter, sales climbed 34%, which was a bit ahead of the average 30% increase.

Despite the continued supply chain woes, the analyst believes investors will soon forget about them and focus instead on the iPhone 7 launch expected in September. White has a Buy rating and $200 per share price target on the iPhone maker’s stock.

Even more signs of iPhone weakness

While White looked at Taiwanese suppliers Stifel analyst Aaron Rakers and his team examined results from two specific Apple suppliers: Cirrus Logic and Qorvo. Both companies provided their preliminary December quarter results, and both reports indicate the continuation of negative revisions happening across Apple’s supply chain.

Despite these negative data points, they think more and more investors are starting to believe that the concerns about the March and June quarters are becoming reflected in the iPhone maker’s shares. They add that the expansion in Apple’s installed base should be a long-term positive.

Apple contributes 70% of Cirrus Logic’s sales

The Stifel team reports that on average, Apple has accounted for an average of 71% of Cirrus Logic’s total sales and about 85% of sales for its Audio Products division. The supplier reported about $347 million in revenue, which missed the consensus estimate of $386.1 million widely. They added that even though historically there has been a high correlation between these metrics and Apple’s iPhone and iPad shipments over the last several years, but after the March 2015 quarter, they’ve been seeing a disconnect between them.

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Qorvo lacks correlation with Apple’s results

Qorvo reported preliminary December quarter revenue of about $620 million, which is 15% below the midpoint of the company’s original guidance in November. Weaker than expected sales in the Mobile Products business, which makes up about 80% of total revenue, was blamed for the disappointment. However, the Stifel team also reports that there hasn’t been a historic correlation between the iPhone maker’s results and Qorvo’s results because of the iPhone maker’s increasing revenue contribution over the last three years.

However, if Rakers and team assume that Apple again made up about 32% of the supplier’s revenue in the December quarter, it appears as if Apple’s revenue contribution declined by about 13%.

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Stifel has a Buy rating and $140 per share price target on Apple shares.

Graphs in this article are courtesy Stifel.

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