It’s typically categorized as a valuation metric and is most often quoted as Cash Flow per Share and as a Price to Cash flow ratio. A positive change in the cash flow is desired and shows that more ‘cash’ is coming in than ‘cash’ going out. Projected EPS Growth looks at the estimated growth rate for one year. It takes the consensus estimate for the current fiscal year (F1) divided by the EPS for the last completed fiscal year (F0) (actual if reported, the consensus if not). Historical EPS Growth Rate looks at the average annual (trailing 12 months) EPS growth rate over the last 3-5 years of actual earnings. A higher number means the company has more debt to equity, whereas a lower number means it has less debt to equity.
For one, part of trading is being able to get in and out of a stock easily. If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. This is also useful to know when comparing a stock’s daily volume (which can be found on a ticker’s hover-quote) to that of its average volume. A rising stock on above average volume is typically a bullish sign whereas a declining stock on above average volume is typically bearish. The 52 Week Price Change displays the percentage price change over the most recently completed 52 weeks (260 trading days).
Although Apple stock has rallied by almost 50% over the last 12 months, it has underperformed year-to-date, rising by just about 13% versus the S&P 500 which was up by almost 17%. The underperformance comes as investors rotated trade gold online out of pandemic winners such as tech stocks, to more cyclical and value stocks to play the re-opening. Apple, which trades at almost 30x forward earnings, which is above historical levels, has been impacted to a certain extent.
The tech giant’s shares have already rebounded sharply. Is it too late to buy?
These returns cover a period from January 1, 1988 through July 31, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return.
So, when comparing one stock to another in a different industry, it’s best make relative comparisons to that stock’s respective industry values. Cash Flow per share ($/share) calculates the amount of incoming cash vs. the amount of outgoing cash for a company. It’s then divided by the number of shares outstanding to determine how much cash is generated per share. In contrast, the net income that goes into the earnings portion of the P/E ratio does not add these in, thus artificially reducing the income and skewing the P/E ratio. Our testing substantiates this with the optimum range for price performance between 0-20.
In general, a lower number or multiple is usually considered better that a higher one. Value investors will typically look for stocks with P/E ratios under 20, while growth investors and momentum investors are often willing to pay much more. Aside from using absolute numbers, however, you can also find value by comparing the P/E ratio to its relevant industry and its peers. Note; companies will typically sell for more than their book value in much the same way that a company will sell at a multiple of its earnings. While a P/B of less than 3 would mean it’s trading at a discount to the market, different industries have different median P/B values.
Like earnings, a higher growth rate is better than a lower growth rate. Seeing a company’s projected sales growth instantly tells you what the outlook is for their products and services. As a point of reference, over the last 10 years, the median sales growth for the stocks in the S&P 500 was 14%. Of course, different industries will have different growth rates that are considered good. So be sure to compare a stock to its industry’s growth rate when sizing up stocks from different groups.
- It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
- The services segment is vital because it generates higher profit margins than the product segment.
- In addition, Apple Inc. has a VGM Score of C (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style).
- According to our calculations, the broad equity market is generally overvalued, and the technology sector in particular is even more overvalued; however, in any market there are always pockets of undervaluation.
- You can research funds and buy shares using an online brokerage account.
But, it’s made even more meaningful when looking at the longer-term 4 week percent change. And, of course, the 4 week change helps put the 1 week change into context. The Daily Price Change displays the day’s percentage price change using the most recently completed close. The X Industry values displayed in this column are the median values for all of the stocks within their respective industry. When evaluating a stock, it can be useful to compare it to its industry as a point of reference. For example, a regional bank would be classified in the Finance Sector.
Here’s what to consider when making that decision, and how to buy Apple if you decide it’s the right choice for you. Following iPhones, the Services segment (including subscriptions such as Apple Music, TV+, and other apps and software) is the second-largest segment, accounting for 20% of total revenue. Kuo surmised that current sales indicate the iPhone 14 and Plus are selling worse than last year’s iPhone 13 mini, which Apple cut production on in the first half of 2022 because of low demand. As a result, Apple could do the same to the iPhone 14 and Plus and slim down production as soon as November, according to Kuo. Weak pre-sales for the non-Pro models are concerning as they are usually the highest-selling iPhones in the yearly lineup.
Research the fundamentals of Apple stock
The Earnings Yield (also known as the E/P ratio) measures the anticipated yield (or return) an investment in a stock could give you based on the earnings and the price paid. Like the earnings yield, which shows the anticipated yield (or return) on a stock based on the earnings and the price paid, the cash yield does the same, but with cash being the numerator instead of earnings. For example, a cash/price ratio, or cash yield, of .08 suggests an 8% return or 8 cents for every $1 of investment.
The technique has proven to be very useful for finding positive surprises. Apple stock is traded on the tech-heavy NASDAQ stock exchange under the ticker AAPL. As part of your research, you can review Apple’s annual and quarterly reports, which will outline key information regarding the company’s operations, financial results, sources of income and expenses. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
The detailed multi-page Analyst report does an even deeper dive on the company’s vital statistics. It also includes an industry comparison table to see how your stock compares to its expanded industry, and the S&P 500. Fortunately, however, Apple has become far more than a tech hardware company. Indeed, the tech giant’s second largest segment after iPhone is now its services business. The segment includes revenue from digital sales and subscriptions in the App Store, advertising, and services like iCloud, AppleCare, licensing, and more. Reduced spending in the tech industry hit countless companies over the last year, with Samsung and Xiaomi experiencing smartphone shipment declines of 19% and 24%, respectively, in the first quarter of 2023.
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Management noted that quarterly sales would have been up in constant currency (500 basis points in foreign-exchange headwinds). Gross margins rose 130 basis points sequentially to 44% thanks to a more favorable product mix. With hardware sales poised to weaken while services revenue stays resilient, we think Apple’s gross margins will stay above 44% for the rest of fiscal 2023. Apple’s fiscal second-quarter results surpassed our estimates, thanks to outperformance in iPhone and services revenue. We anticipated a slowdown in the firm’s hardware products following several years of strong growth related to COVID-19-induced work- and learning-from-home trends, as well as the initial rollout of 5G. Although most segments fell year over year, we were pleased to see the iPhone and services units exhibit modest growth.
Throughout 2022, AAPL paid a quarterly dividend of 23 cents per share. However, given the nature of dividends, this amount could change at any time. Apple’s stock has split five times since the company first went public on December 12, 1980. Stock splits often occur when a company’s https://bigbostrade.com/ stock has begun trading at a premium. If your shares are held in a taxable investment account, you’ll also want to consider any capital gains taxes you may have to pay. You can compare this information to other stocks or benchmarks like the S&P 500 and Nasdaq Composite Index.
First, it ignited the personal computer revolution in the 1970s with the Apple II. Apple shares fell in early September after China banned central government officials from using iPhones and other foreign-branded phones. China cited national security concerns for the move, but it comes amid heightened trade tensions between the U.S. and China. Vision Pro is part of Apple’s push into the wearables market, following the success of the Apple Watch and AirPods. The Pro models also will sport design improvements such as a titanium frame, improved battery life and more memory.
Apple’s 2021 Revenues are projected to jump by a solid 21%, per consensus estimates, likely growing faster than Apple’s cost base. Moreover, the full impact of the new iPhone 12 is only likely to be seen in the coming quarters, as production picks up and the devices see full quarters of availability. For perspective, the device went on sale only about 3 to 4 weeks into Q1’FY21, with popular models remaining short-supplied. In reviewing the margin forecasts, the consensus expectation is for a much higher operating margin averaging 26.3%, some 60 basis points above ours. By way of comparison, Apple’s operating margin has not reached that level since 2018. As a result, consensus EPS for the next three years is $4.42, $4.65, and $4.89, which based on the current price results in forward P/E ratios of 29.6 times, 28.2 times, and 26.8 times.
Style Scorecard
In 2019, the base model iPhone 11 was the top-selling version every week in the year’s last quarter. Then, in the first half of 2020, the iPhone 11 sold 79% more units than the Pro Max version and 82% more than the smaller Pro model. As the lower-priced base models, the iPhone 14 and the bigger Plus version would normally be outselling the Pro versions, but that doesn’t seem to be the case in 2022. In the fourth quarter of 2021, services made up 15.7% of the company’s revenue versus 23.6% in Apple’s latest quarter. The rise of services is positive as it can aid in safeguarding the company in the event of poor iPhone sales, which look to be a real possibility in Apple’s latest lineup.
We also suspect that many customers are holding on to their phones longer, as premium devices are more than good enough for today’s needs (web browsing, streaming, social media). Some peers are willing to sell hardware essentially at cost to drive market share and stickiness in other business segments. Should these devices supersede their iOS counterparts, Apple’s devices may be at risk.
The new iPhone 12 handsets saw their first full quarter of sales over Q2 FY’21, helping iPhone revenue rise 65% compared to last year. The iPhone is Apple’s most profitable hardware product and the new handset is also priced at a premium compared to its predecessors, helping margins. For example, Apple says that it has about 660 million paid subscriptions on its platform now, marking an increase of 145 million compared to last year. Separately, Apple said that it also benefited from a favorable foreign exchange environment. So what are the key trends that are likely to drive Apple’s results? While Apple launched its latest iPhone 13 handsets in September, we don’t expect the device to be a major driver of Apple’s sales, as it was available for sale for just about a week in Q3.
Financials
Consumer electronics giant Apple (AAPL) has posted three straight quarters of declining sales, a factor that has weighed on Apple stock. The company is hoping the upcoming release of its iPhone 15 handsets will set it on a growth path. Meanwhile, many investors might be wondering if AAPL stock is a buy right now.
The was valued at over $2.6 trillion in 2022 and brought in $0.4 trillion in revenue making it equal in size to the economies of Thailand and Belgium which are ranked 24th and 23rd largest worldwide. We believe Apple stock is modestly overvalued compared with our $150 fair value estimate, even though it trades in a 3-star, or fairly valued, range. Apple’s results topped our expectations, but we’re cautious on the next several quarters.