Ask Matt: Why does Apple stock keep falling?

• Apple was the %22must own%22 stock in 2012
• Investors who paid up for growing revenue and fat margins are seeing those things slip away
• Shares of Apple are being repriced to reflect the realities of economics

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: Why does Apple's stock keep falling?

A: Apple is a great example of a stock that got too popular for its own good.

When a stock like Apple lures so many investors, who drive the price up, everything is fine as long as the company can deliver increasing sales growth and maintain industry-beating profits.

But when the company's stellar growth or margins suffer even a bit, and the realities of economics set in, investors who priced the stock for perfection have second thoughts.

Apple's stock is an example of a stock being repriced for reality. The stock's first problem is the slowing growth and pace of innovation. The stock hinged on the routine unveiling and intense marketing of new gadgets. Thanks to a string of hit products, such as the iPod and iPhone, Apple has put up incredible growth. Revenue growth hit 66% in fiscal 2011 and 52% in 2010. But growth is slowing, hitting 45% in 2012 and 29% in 2013. Still-strong growth, but not enough to support the stock's price, especially when it was trading at $700.

Meanwhile, Apple's profit margins are sinking, showing the company's costs are rising faster than sales. Apple kept 6.2% of revenue in fiscal 2012 after paying direct and overhead costs. That's down from 6.4% in 2011 and has fallen steadily every year at least since hitting 10% in fiscal 2008.

Investors paid up for Apple's fast growth and fat margins. But with both of those slipping away, so too is the stock's price.