Forex Trading

Ahead of Earnings, Is Apple Stock a Buy, a Sell, or Fairly Valued?

should i buy apple stock

In the last 15 years, AAPL’s price has increased by over +5,600%. Largely due to Steve Jobs’ vision for a pocketable and easy-to-use computer, which was realized with the launch of the iPhone in 2007. Company shakeups tend to have an adverse impact on the share price.

  • This makes the first major hardware release by the company in almost a decade.
  • But Apple does have some weaknesses that could affect it—and its stock price—in the coming years.
  • It’s an integral part of the Zacks Rank and a critical part in effective stock evaluation.
  • Has risen on an expanded multiple, which isn’t the greatest thing, pushing 30x earnings.

To put that in perspective, let’s say you wanted to invest $500 in 2018. If you had invested $500 in Apple stock in March 2018, your investment would be worth $1,660 today. But if you had invested $500 in the S&P 500 index in 2018, you’d have $738.

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After all, in 2021 the corporation’s P/E used to be over 40. But it is highly likely we will have a full-scale recession soon enough thanks to the Fed’s hawkishness and the already high interest rates. So, the sales growth between 2020 and 2022 will most probably not endure since we won’t have as much cheap money available.

The campus features a massive circular building nicknamed The Spaceship and provides working space for over 12,000 employees. The circular shape houses a park and a pond and there are many amenities within the facility including cafes, a wellness center, care clinics, and terminals for the shuttle system. To get a better idea of your risk profile and if you should buy the AAPL stock, speak to a Cube Wealth Coach or download Cube Wealth for free today. We’d like to share more about how we work and what drives our day-to-day business. With its 3-star rating, we believe Apple stock is fairly valued when compared with our fair value estimate. However, the algorithm forecasts negative price movement on the 6-month to 12-month scale, with AAPL potentially losing over -21% and bottoming out at $136 in May 2024.

should i buy apple stock

And what’s amazing is that consumers don’t hesitate to keep paying up for the newest version. AAPL stock has an IBD Relative Strength Rating of 88 out of 99. The Relative Strength Rating shows how a stock’s price performance stacks up against all other stocks over the last 52 weeks. Apple earned $1.52 a share on sales of $94.8 billion for the quarter ended April 1.

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The 4 Week Price Change displays the percentage price change for the most recently completed 4 weeks (20 trading days). Return on Equity (or ROE) is calculated as income divided by average shareholder equity (past 12 months, including reinvested earnings). The income number is listed on a company’s Income Statement. Shareholder Equity (which is the difference between Total Assets and Total Liabilities) can be found on the Balance Sheet. A higher number means the more debt a company has compared to its capital structure. Investors like this metric as it shows how a company finances its operations, i.e., what percentage is financed thru shareholder equity or debt.

The ongoing uptrend in equity is due to the upcoming pause in rate hikes. However, it is still unclear for how long the Fed will keep the rates high. Apple Stock broke above its 2022 all-time high on June 5, 2023.

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Apple’s obsession with innovation resulted in the production of AirPods — wireless Bluetooth earbuds. It has integrated its software into the Apple Watch and offered streaming services via Apple TV+. Tech ETFs like the Vanguard Information Technology Index Fund ETF hold large holdings in Apple while also retaining shares of other major tech giants. Investing in a technology ETF allows you to instantly diversify your portfolio while also increasing your exposure to Apple. The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in.

should i buy apple stock

But, typically, an aggressive growth trader will be interested in the higher growth rates. Enterprise Value (EV) is Market Capitalization + Debt – Cash. Many investors prefer EV to just Market Cap as a better way to determine the value of a company. EBITDA, as the acronym depicts, is earnings before interest, taxes, depreciation and amortization.

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Zacks’ proprietary data indicates that Apple Inc. is currently rated as a Zacks Rank 3 and we are expecting an inline return from the AAPL shares relative to the market in the next few months. 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). Valuation metrics show that Apple Inc. may be overvalued.

Apple has an installed base of more than 2 billion devices in use today, including well over 1 billion iPhones. However, demand for the high-end iPhone 14 Pro models has been strong, while sales of the regular models have disappointed.

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It needs to form a new base in the right market conditions before setting a potential buy point. Check out IBD’s Big Picture column for the current market direction. Apple has been an American success story several times over. First, it ignited the personal computer revolution in the 1970s with the Apple II. Then it reinvented the PC in the 1980s with the Macintosh. The company’s next earnings report is likely to happen in late July or early August.

The company’s product range consists of computers, smartphones, tablets and accessories. Since Apple remains innovative, popular and financially strong, it is in position to succeed in 2023. Either way, while it’s always difficult to predict a forecast perfectly, Apple is poised to return to solid returns in the next 12 months.

Though the exact percentage is debated, most researchers agree that Apple’s flagship product, the iPhone, now accounts for over 20% of smartphone usage in the U.S. This number continues to grow annually and is projected to continue through 2023. In the tech space of the United States, Apple’s popularity and products are unrivaled. If you’ve never invested before, you might think that you need millions of dollars to become a serious investor. However, the truth is that you can get started with just a few dollars in your account. “It does have headwinds to contend with, not least the potential for further supply chain disruption from Covid lockdowns in China and a slowing of growth in that lucrative market,” she said.

The CAPE’s main contribution is adjusting for times when earnings are either enjoying an unsustainable boom, or stuck in a temporary rut. Indeed, the high volatility of corporate profits tends to distort P/Es as reported. A huge surge in EPS that’s bound to fade when heightened competition restores margins to traditional norms artificially swells the denominator. That lowers P/Es measured at a single point in time, and makes shares look a lot cheaper, or less overpriced, than they really are. In other words, the triggers and period you want to keep the position open or closed.

As an investor, you want to buy srocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style. As an investor, you want to buy stocks with the highest probability of success. That’s always given him pause, as 50% of revenue comes from iPhone sales. But strong competitive position is strengthening, moat is widening.

Therefore, you will be able to manage your trade and change it at any time according to your convenience. Apple’s stock is owned by a variety of retail and institutional investors. Insiders that own company stock include Arthur D Levinson, Chris Kondo, Deirdre O’brien, Jeffrey E Williams, Jeffrey E Williams, Katherine L Adams, Katherine L Adams, Luca Maestri and Timothy D Cook.

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