Andy Zaky argues on his blog that investors shouldn't use the price-to-earnings ratio (or P/E) when evaluating Apple stock. That's because Apple's earnings are artificially lowered by the way the company calculates iPhone revenue. Instead of plugging an iPhone sale directly into the revenue column, Apple uses a subscription method that slowly recognizes revenue over a two-year period. So revenue for a phone sold today goes mainly into the "current deferred revenue" and "non-current deferred revenue" columns until two years have passed. Zaky thinks that about $2 billion in revenue is missing from Apple income statements because it's stuck over in the deferred columns. And analysts are ignoring that, he writes. As a result, Apple is generally undervalued. Apple should be analyzed on a price-to-free cash flow basis, he writes. He predicts that the Street will increase its valuation of Apple, but that won't happen until next year.