For today’s bulletin, we take a look at Apple $AAPL and their latest earnings. We also provide a link to download a FREE STOCK REPORT on the company.
VALUATION WATCH: Overvalued stocks now make up 51.24% of our stocks assigned a valuation and 20.06% of those equities are calculated to be overvalued by 20% or more. Twelve sectors are calculated to be overvalued.
Apple Inc. (AAPL) is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. It sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers. Apple Inc. is headquartered in Cupertino, California.
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The Apple juggernaut continues to roll on as the company reported great results for Q3, 2018 yesterday. Typically, the third quarter is–relatively–weak for the firm as customers wait on new iPhones and other products. However, yesterday’s results showed record revenue for Q3.
The Company posted quarterly revenue of $53.3 billion, an increase of 17 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.34, up 40 percent.
CEO Tim Cook noted that this marked Apple’s “fourth consecutive quarter of double-digit revenue growth” with “strong sales of iPhone, Services and Wearables.”
Luca Maestri, Apple’s CFO, noted that Apple “returned almost $25 billion to investors through our capital return program during the quarter, including $20 billion in share repurchases.” That should help to boost share prices further over the nest few years as this is a ongoing program.
What analysts find particularly significant here is that Apple derived almost $10 billion in revenue from its business services division–up 31% over last year. That shows that the company may be able to continue growth even if the phone and computer market falters.
But, clearly there is still room to grow in that market as well. Apple provided guidance indicating that they expect strong iPhone sales to continue with an increase of 14%-18% over last year. And, those sales are predicted to increase despite the higher prices for the top-model iPhones–like the $999 iPhone X flagship. Higher average prices for iPhones will mean greater profits.
Ironically, given the company history, the one piece of bad news in Apple’s latest results was that computer revenues were down. The Macs and iPads are not selling quite as well.
As you can see from the long-term chart below, our models typically like Apple. It is rare for it not to be rated a BUY or STRONG BUY. We see no exception to this today, and we would be hard-pressed to bet against this company. It continues to impress.
VALUENGINE RECOMMENDATION: ValuEngine continues its BUY recommendation on APPLE INC. Based on the information we have gathered and our resulting research, we feel that APPLE INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Sharpe Ratio.
You can download a free copy of detailed report on Apple Inc. (AAPL) from the link below.
| ValuEngine Forecast | ||
| Target Price* |
Expected Return |
|
|---|---|---|
| 1-Month | 191.06 | 0.60% |
| 3-Month | 192.03 | 1.11% |
| 6-Month | 197.06 | 3.76% |
| 1-Year | 203.68 | 7.25% |
| 2-Year | 221.62 | 16.70% |
| 3-Year | 232.89 | 22.63% |
| Valuation & Rankings | |||
| Valuation | 13.49% overvalued | Valuation Rank(?) | 28 |
| 1-M Forecast Return | 0.60% | 1-M Forecast Return Rank | 89 |
| 12-M Return | 27.69% | Momentum Rank(?) | 81 |
| Sharpe Ratio | 1.05 | Sharpe Ratio Rank(?) | 94 |
| 5-Y Avg Annual Return | 23.68% | 5-Y Avg Annual Rtn Rank | 92 |
| Volatility | 22.48% | Volatility Rank(?) | 63 |
| Expected EPS Growth | 14.64% | EPS Growth Rank(?) | 43 |
| Market Cap (billions) | 1,106.18 | Size Rank | 100 |
| Trailing P/E Ratio | 17.49 | Trailing P/E Rank(?) | 68 |
| Forward P/E Ratio | 15.25 | Forward P/E Ratio Rank | 51 |
| PEG Ratio | 1.19 | PEG Ratio Rank | 33 |
| Price/Sales | 4.47 | Price/Sales Rank(?) | 25 |
| Market/Book | 8.72 | Market/Book Rank(?) | 17 |
| Beta | 1.21 | Beta Rank | 26 |
| Alpha | 0.11 | Alpha Rank | 76 |
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Steve Hach
Senior Editor
ValuEngine.Com