Apple Inc. (AAPL) has grabbed the attention of investors on Zacks.com lately. Taking a closer look at various factors influencing the stock’s short-term performance seems fitting.
Over the past month, Apple’s stock has shown a healthy growth of +6.9%, outperforming the Zacks S&P 500 composite, which stood at +1.1% during the same period. Notably, the Zacks Computer – Mini computers industry, to which Apple belongs, has seen a commendable 4.6% rise in the past month. But what’s next for Apple?
Deciphering Earnings Estimate Revisions
While sudden media releases can create a ‘trending’ status for a stock based on short-term changes, the bedrock of impactful investment decisions lies in fundamental facts. Zacks’ primary focus on evaluating earnings projections stems from the belief that a stock’s fair value correlates with its future earnings trajectory.
For the ongoing quarter, Apple is anticipated to report earnings of $1.33 per share, marking a +5.6% change from the same quarter last year. The Zacks Consensus Estimate has seen a modest +0.1% alteration in the past 30 days.
The consensus earnings estimate for the current fiscal year stands at $6.59 per share, reflecting a year-over-year increase of +7.5%. This estimate has seen a similar +0.1% modification over the last month.
Revenue Projections and Historical Pattern
Anticipated revenue figures for Apple point to a steady growth trajectory. Forecasts indicate a +2.4% year-over-year change in sales for the current quarter. The estimates for the current and upcoming fiscal years, at $386.46 billion and $416.92 billion respectively, suggest optimistic growth prospects of +0.8% and +7.9%.
Apple’s revenue and earnings performance in the last reported quarter showcased resilience despite a -4.3% decline in revenue from the previous year. The company managed to surpass the Zacks Consensus Estimate for both revenue and earnings, maintaining a positive trend in exceeding expectations over the recent quarters.
Assessing Valuation Metrics
Any prudent investment strategy involves a rigorous evaluation of a stock’s valuation. Comparing current valuation multiples such as price-to-earnings (P/E) and price-to-sales (P/S) to historical data unveils whether a stock is fairly priced. Apple, however, garners a Zacks Value Style Score of D, indicating premium pricing compared to its industry peers.
The Zacks Rank #2 (Buy) for Apple, fueled by robust earnings estimate revisions and notable industry positioning, hints at potential outperformance in the near term. As investors navigate through various sources of information, including Zacks.com, weighing the comprehensiveness of details before making investment decisions remains critical.
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