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Apple Inc AAPL

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Stock XNAS Rating as of
$173.03 +3.73 (2.20%)
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Company Report

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Apple Earnings: Higher Medium-Term iPhone Forecast Brings Our Valuation Up to $170 From $160

William Kerwin

We raise our fair value estimate for wide-moat Apple to $170 per share from $160, behind higher expectations for iPhone and services revenue in the medium term. Apple’s March-quarter results were aligned with our model, although June-quarter guidance was below our rosy expectations. We expect a soft fiscal 2024 for Apple, driven by headwinds to iPhone revenue in China and slower iPhone refreshes globally. However, we raised our forecast for iPhone revenue growth in fiscal 2025 in anticipation of a stronger refresh cycle for the iPhone 16 in fall 2024 (Apple’s first fiscal quarter.) We expect Apple's generative artificial intelligence product announcements this year will drive improved growth next year. Shares rose after hours in line with our valuation raise, which we attribute to lower iPhone downside out of China than investors may have feared. Shares look fairly valued to us.

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Price vs Fair Value

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AAPL is trading within a range we consider fairly valued.
Price
$169.30
Fair Value
$791.00
Uncertainty
Medium
1-Star Price
$346.00
5-Star Price
$774.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Apple offers an expansive ecosystem of tightly integrated hardware, software, and services, which locks in customers and generates strong profitability.

Bears

Apple is prone to consumer spending and preferences, which creates cyclicality and opens the firm up to disruption.

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Trading Information

Previous Close Price
$169.30
Day Range
$170.89–173.42
52-Week Range
$164.08–199.62
Bid/Ask
$183.45 / $183.50
Market Cap
$2.67 Tril
Volume/Avg
94.2 Mil / 61.6 Mil

Key Statistics

Price/Earnings (Normalized)
26.37
Price/Sales
6.90
Dividend Yield (Trailing)
0.57%
Dividend Yield (Forward)
0.57%
Total Yield
3.56%

Company Profile

Apple is among the largest companies in the world, with a broad portfolio of hardware and software products targeted at consumers and businesses. Apple’s iPhone makes up a majority of the firm sales, and Apple’s other products like Mac, iPad, and Watch are designed around the iPhone as the focal point of an expansive software ecosystem. Apple has progressively worked to add new applications, like streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors while working with subcontractors like Foxconn and TSMC to build its products and chips. Slightly less than half of Apple’s sales come directly through its flagship stores, with a majority of sales coming indirectly through partnerships and distribution.
Sector
Technology
Industry
Consumer Electronics
Stock Style Box
Large Core
Total Number of Employees
161,000
Website
https://www.apple.com

Competitors

Valuation

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Metric
AAPL
GOOGL
MSFT
Price/Earnings (Normalized)
 26.3725.0334.19
Price/Book Value
 35.326.9311.60
Price/Sales
 6.906.5112.46
Price/Cash Flow
 22.1018.0526.51
Price/Earnings
AAPL
GOOGL
MSFT

Financial Strength

Metric
AAPL
GOOGL
MSFT
Quick Ratio
 0.921.981.02
Current Ratio
 1.072.151.22
Interest Coverage
 —285.7841.49
Quick Ratio
AAPL
GOOGL
MSFT

Profitability

Metric
AAPL
GOOGL
MSFT
Return on Assets (Normalized)
 32.04%25.77%19.65%
Return on Equity (Normalized)
 174.73%36.64%38.71%
Return on Invested Capital (Normalized)
 63.75%32.10%28.79%
Return on Assets
AAPL
GOOGL
MSFT
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