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Apple (AAPL) earnings preview: mid-teen revenue growth

12:27 pm ET, 27 Jul 2018

Apple Inc. (AAPL) is expected to report earnings on July 30 before market open. The report will be for the fiscal quarter ending June 2018. Shares are trading at 193.24, up 1.63%.

What are APPL earnings expectations?  What should investors know about Apple prior to the earnings?

Apple’s competitive advantage stems from its ability to package hardware, software, services, and third-party applications into sleek, intuitive, and appealing devices. This expertise enables the firm to capture a premium on its hardware, unlike most of its peers. Despite its admirable reputation, loyal customer base, and a myriad of unique products, the consumer hardware space can be unforgiving to firms unable to consistently satiate the customer’s appetite for more features.

Following a solid rebound in fiscal 2017 where Apple enjoyed healthy sales of iPhones, Macs, Services, and Other Products, the firm is poised for stellar revenue growth of 13% in fiscal 2018 thanks to the iPhone X and iPhone 8 launches at higher average selling prices than prior iPhones. Meanwhile, both Services and Other Products, including AirPods and Apple Watch, will grow 21% and 31%, respectively. While analysts foresee a slowdown in iPhone spending in fiscal 2019 and fiscal 2020, the smartphone titan will generate midcycle revenue growth in the mid-single digits.

The firm enjoys stellar returns on its devices by offering a unique user experience with its iOS ecosystem. Contrary to its peers in PCs and smartphones that rely on relatively open operating systems, Windows and Android, respectively, Apple’s walled garden approach for its popular iOS allows it to charge a premium for relatively commoditized hardware not too different from that sold by Samsung, Dell, and others. Customer switching costs are elevated for Apple users as a non-Apple iOS experience does not exist, unlike computing platforms for the Windows or Android ecosystems that boast PCs and smartphones from many firms.

Apple Inc. has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 10 cents ($1.67 actuals vs. $1.57 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 20 cents ($2.07 actuals vs. $1.87 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 5 cents ($3.89 actuals vs. $3.84 forecast) in FQ1’18;
  • Beat analyst EPS estimates by 6 cents ($2.73 actuals vs. $2.67 forecast) in FQ2’18.

For FQ3’18, EPS is expected to grow by 31% year-over-year to $2.19, while revenue is expected to grow 15% year-over-year to $52.37 billion.  

Over the last month, Apple Inc. (AAPL) returned +4.5%

Apple Inc. (AAPL) average analyst price target ($197.76) is 2.34% above its current price ($193.24).

For the latest price and information on Apple Inc., please visit Finstead and search for "AAPL price" or "AAPL news".

QUALCOMM (QCOM) earnings preview: tepid revenue projections

12:57 am ET, 23 Jul 2018

QUALCOMM (QCOM) is expected to report earnings on July 25 after market close.  The report will be for the fiscal quarter ending June 2018.  Shares are trading at 58.35, down -0.07%.

What are QCOM earnings expectations?  What news will the market be watching out for?  

Analysts expect Qualcomm’s licensing business to show a solid growth, because of increased 3G and 4G device adoption. However, recent government investigations into the business model and the Apple lawsuit against Qualcomm’s business practices have increased the possibility of negative effects on royalty revenue. Qualcomm may be able to withstand these inquiries and maintain adequate royalty rates.

Qualcomm is a steward of the digital communication technology known as CDMA, which is commonly referred to as a third-generation, or 3G, wireless communications standard. 3G allows devices to send/receive voice signals and wireless data, and has played a major role in the proliferation of mobile devices. Qualcomm’s treasure trove of patents (with a monopoly in 3G and a significant portion of 4G) allows the firm to charge device-makers a royalty fee as a percentage of the price of each 3G and 4G device sold (as most 4G phones are backward-compatible with 3G).

The firm also designs chips used in smartphones. This part of the business does not have nearly as strong of a competitive advantage as licensing, nor is it as profitable. Qualcomm’s high-end Snapdragon application processors were once commonplace in high-end smartphones, but the shift toward in-house chips has threatened Qualcomm’s position. The major blow occurred when Samsung utilized internally developed chips in its Galaxy S6 device. 

While Qualcomm has reclaimed some business back at Samsung, there will be fewer lucrative opportunities going forward, owing to competition and OEMs that build their own chips. The firm historically also had a competitive edge in baseband chips, which are critical to devices’ inherent ubiquitous connectivity. Qualcomm had been the sole baseband supplier at Apple for multiple iterations of the iPhone, but Intel has since won a portion of this business. 

QUALCOMM Incorporated has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 2 cents ($.83 actuals vs. $.81 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 11 cents ($.92 actuals vs. $.81 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 8 cents ($.98 actuals vs. $.90 forecast) in FQ1’18;
  • Beat analyst EPS estimates by 10 cents ($.80 actuals vs. $.70 forecast) in FQ2’18.

For FQ3’18, EPS is expected to decline by 14% year-over-year to $.71, while revenue is expected to decline 2% year-over-year to $5.2 billion.  

Over the last month, QUALCOMM (QCOM) returned -2.52%. 

QUALCOMM (QCOM) average analyst price target ($63.41) is 8.67% above its current price ($58.35).

For the latest price and information on QUALCOMM, please visit Finstead and search for "QCOM price" or "QCOM news".

Energous (WATT) downgraded, but stock is up: why?

1:01 pm ET, 22 May 2018

Just as ValuEngine downgraded Energous (WATT), investors reacted violently and bought shares of this company.  The stock price is up 6% in mid-day trading today. What is driving this?  What is WATT stock price forecast? 

Energous Corporation develops a wire-free charging system.  Its key product WattUp consists of semiconductor chipsets, software, hardware designs, and antennas that enables radio frequency based wire-free charging for electronic devices, providing power at a distance and enables charging with mobility under software control. 

As a pioneer in wireless charging, Energous has a significant long-term potential.  Our technical analysis confirms this--and also highlights a strong positive short-term sentiment.  

The mid-term potential looks a little less promising.  Short-sellers doubt that Apple will ever use Energous' wireless charging technology.  However, VentureBeat reported that Energous and Apple have been working together since 2014. 

S&P Capital IQ analysis shows strong growth prospects for the stock.  However, the analysis also highlights high stock valuation and relatively poor financial health.  See details below. 

Equity analysts are positive above Energous stock price prospects.  Based on Finstead research, WATT average analyst price target is $37.60 (visit Finstead and type "WATT price target" or "WATT upside" to get the latest scoop on equity analysts' position).

Alphabet (Google), Apple, Amazon or Facebook: who will win the race?

1:59 am ET, 08 May 2018

This past weekend we asked stock investors on Twitter: which company among the tech giants (Google / Alphabet, Apple, Amazon or Facebook) will outgrowth the competition?  We got some pretty insightful responses from our Twitter audience and are sharing with you their growth predictions in this Finstead Bites post.

Our Twitter poll shows, investors feel more optimistic about Alphabet (Google) and Amazon, and less optimistic about Facebook and Apple when it comes to those companies' growth prospects. 

Here is the poll question, verbatim: 

đź’ˇWhich company do you think will grow the most in the next 5 years? (To clarify: by growth, I mean market cap growth.)

And here are the responses:  


Buy-side stock analysts, on the other hand, do not see as much stock price upside for Amazon and envision a greater upside for Facebook.  This is somewhat understandable, given Facebook's recent snafu caused by user data leak.  

We consulted Finstead to find out  price target upside for each of those stocks (e.g., searched for "GOOGL upside")--and here is what we found out:

  • GOOGL price target upside is 21.09%.
  • FB price target upside is 25.68%.
  • AAPL price target upside is 3.73%.
  • AMZN price target upside is 3.96%.

The investors we polled on Twitter feel optimistic about Alphabet (Google) for the following reasons:

  • Alphabet's history of execution is unparalleled... it has made significant investments to diversify its revenues, and the effort is paying off.
  • Online and mobile video consumption is going through the roof and Alphabet remains strongly positioned here with YouTube. In its race to target TV ad dollars, Alphabet allowed Nielsen and comScore tagging of YouTube videos to determine the effectiveness of YouTube vs (compared to TV ads)--and YouTube is winning thus far.
  • Android’s dominant global market share of smartphones leaves Google well positioned to continue generating top-line growth as search traffic shifts from desktop to mobile.

Comparing Alphabet and Amazon, it's important to note that those two are still fundamentally different businesses.  While they compete in many areas, they focus on different things.  

The two companies are in the same range based on the market capitalization.  However, Amazon employs a lot more people (over 340,000) than Alphabet (78,000+).  Amazon generates more revenue than Alphabet ($178B vs.  $111B), is growing significantly faster (38% vs. 24%), but is also less profitable (1.7% vs.  11.42%). 

For a detailed comparison of the two companies, please visit Finstead and type AMZN vs. GOOGL.  

Fitbit (FIT): Is The Stock Worth Investing In?

4:53 pm ET, 16 Apr 2018

The Fitbit stock (NYSE: FIT) barely moved today.  What is the stock price forecast for this company?

And what are the things you should know about this stock?

Fitbit offers a range of health devices and is gradually gaining steam since the holiday season of this year.

But in the previous year, the company had a turbulent period. Sales declined by 25% because the company's products didn’t cater to consumer demands, and the competition was very aggressive.  The Fitbit smartwatch proved to be a dud.   

It is necessary for the company to focus on hardware and software aspects of its smartwatches, to stand up against the stiff competition from its rivals, such as Garmin and Apple.  

A huge discount offered to investors today is a clear indication of the challenges the company faces. 

Should you invest in Fitbit’s stock? Per Finstead Research, the company’s shares have the average price target of almost $7.  The stock has an upside of about 21% (vs. current price).

The Fitbit stock has a negative valuation, which indicates that the company registered losses in the past. Trading negative-P/E shares is highly speculative.

Fitbit has a high short share of float, compared to the industry and sector averages. This indicates high potential volatility in the upcoming days.

Netflix (NFLX): Has The Stock Peaked?

11:56 am ET, 11 Apr 2018

The Netflix stock (NASDAQ: NFLX) spiked around 4% today in mid-day trading. The stock witnessed a 60% year-to-date spike (visit Finstead and type “NFLX YTD return” to get the latest return).

What should you know about this stock?

The company’s exciting original content makes the stock more attractive.   Since Netflix is capable of delivering outstanding services in the competitive market, investors are getting more optimistic about sustaining growth.

Its resilience and the lack of dependency on trade agreements have made the stock even more appealing to investors.  Despite the prospect of a trade war between the US and China, the stock has remained unaffected.

Netflix outperformed its rivals such as Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) and Apple (NASDAQ: AAPL).

The growth is evident from the rising number of subscribers throughout the world. It is a cheaper substitute for TV.  Netflix consistently recorded a 6% average growth rate after hitting more than 100 Million paid subscribers in the second quarter of last year.

The Netflix stock surpassed previous quarter's EPS with a remarkable 650%  margin growth. The company recorded a 320% average year-over-year EPS growth since the fourth quarter of 2016, which is a sharp contrast to -15% margin decline from the third quarter of 2016. The margin expansion is a clear indication that the investment in expanding subscriber volume is paying off.

Can the stock sustain the momentum? Per Finstead Research, Netflix has the average price target of $266.

Netflix has a fairly high valuation compared to its peers. Its P/E ratio lags only that of AMZN.

The high Short Share of Float indicates potential volatility in the upcoming days.

Intel and Apple: What's Next?

3:13 pm ET, 03 Apr 2018

Intel’s (NASDAQ:INTC) stock price witnessed a big decline yesterday after Bloomberg reported that Apple would not use Intel chips for its Mac computers. As a part of the multi-step transition, Intel processors will be replaced by native Apple components starting 2020.

Apple did not respond to the ‘news’ and Intel denied acknowledging this as well.  Apart from Intel, its rivals such as Qualcomm, Broadcom, and Arms supply Apple with chips and processors. These are used for various purposes such as artificial intelligence and augmented reality — in addition to in-house chips for Macs, Apple Watches, AirPods, and Beats.

If Apple opts for its own chips instead of other manufacturers’, it will eliminate the critical dependency on the new chip models. It could soon stand out from the competition as the only PC and electronics maker utilizing its own processors.

The Kalamata code is in its initial developmental stage. It is a part of the larger strategy that aims at enabling Apple devices (Macs, iPhones, and iPads) to work in a similar and coordinated way.

This step is a major setback for Intel. The partnership between the two companies has caused the revival of Apple’s Macs and it also helped Intel get to a leading position in the electronics marketplace.

Intel's ability to produce powerful processors compared to its competitors through the use of the latest manufacturing technology has cemented its #1 position on the market.

Will the INTC stock price recover?  Per Finstead research, Intel's average analyst price target is $52, which is close to its current price. The upside is very small.

Intel has a fairly low valuation compared to its peers and lags behind its rivals QCOMCHKPTXNAMD, and NVDA.

Investors should consider a couple of points to estimate the impact of Bloomberg’s claim on Intel’s business going forward:

  • Bloomberg indicated that Apple makes up only 5% of Intel’s total revenue 
  • Apple held 7.6% market share for PC units in the most recent quarter, based on Gartner research.

Perhaps you should wait and see at this critical juncture until things fully play out.  

Microsoft (MSFT): How High Is The Sky?

6:17 pm ET, 27 Mar 2018

Microsoft (NASDAQ: MSFT) declined 5% in today’s trading, to below $90 per share.  Is this a good buying opportunity?   

The equity selloff among the top technology companies was instigated by Trumps's recent political announcement regarding tariffs on foreign goods.  The magnitude of the impact is $60 billion tariffs on Chinese imports.  The worst hit industries will be tech hardware and machinery. 

Beijing reacted by announcing its target--128 US projects which have an import value of $3 billion.  This resulted in a 6% decline for the IT Sector.

But Microsoft has a lot of things going for it.

The recent increase in the company's margins has resulted from the adoption of Azure, Microsoft’s public cloud, more profitable channel distribution, and an ever-growing customer base. The hope is that Microsoft will have a $50 Billion EBIT by mid-2019.

The firm anticipates doubling of the public cloud market to $230B by 2020.  Morgan Stanley thinks Microsoft will hit a $1 Trillion market cap in the upcoming year.

Such a rally over the course of this and next year would make MSFT go from the third largest public enterprise (only Apple and Alphabet and larger judging by market capitalization) to the largest one.

Per Finstead Research, Microsoft has an average price target of almost $104. Its price upside is almost 14%.

Microsoft’s valuation is fairly high among its peers (based on the forward P/E ratio), lagging only ADBE, RHT, and CRM.


FAANG Pullback Inevitable in 2018?

7:09 am ET, 02 Jan 2018

FAANG

As you're entering 2018, you may be wondering which stocks that you own in your portfolio are bound for a 'correction' in 2018.  

The scale of the FAANG rally in 2017  has led some investors to believe that this group has been overdone as an investing theme, especially given signs of overvaluation. 

Facebook, Amazon, and Netflix were up more than 50% over the last 12 months; Apple's gain was over 50%, and Google 'trailed behind' with 30%+ annual stock price growth.

And the FAANG stocks weren’t just market leaders this year; they accounted for a sizable portion of Wall Street’s overall move higher. 

How do the analysts feel about these stocks?  Morgan Stanley said it is still positive on the group, but macro factors could be concerning.  History indicates that returns may moderate their pace and Morgan Stanley analysts question whether growth can be sustained in the upcoming period.  

Apple investors should be especially worried about the $1,000 price tag on the iPhone X that may cut into first-quarter demand.

The group may be less well-insulated from cyclical pressures that many investors anticipate will increase over the next couple of years.  These stocks are tied to the cycle via advertising and consumer spending.

Here is a look-back on Facebook and Amazon stock performance.  Over the last year, FB returned +52.54%. This return is higher than Internet Information Providers sector (42.56%), Technology industry (26.77%), S&P 500 (18.87%) returns.

Over the last year, AMZN returned +52.98%. This return is higher than Catalog & Mail Order Houses sector (20.39%), Services industry (4.74%), S&P 500 (18.87%) returns.

Apple Inc. (AAPL) Stock Guide

Updated at: 6:58 am ET, 13 Nov 2020

Before we start: if you're looking for AAPL stock price, you can quickly find it out by visiting Finny and typing "AAPL quote". If you're looking for a quick scoop on AAPL stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "AAPL". You'll get all this info in one place. Or you can just type "AAPL news" to get the latest stock news.

Looking to buy or sell Apple Inc. (AAPL)? Interested in getting the full scoop on AAPL, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this AAPL stock guide, we'll address key questions about AAPL, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are AAPL earnings?
2. When is AAPL earnings date?
3. What is AAPL dividend?
4. What is AAPL dividend yield?
5. What is AAPL stock forecast (i.e., prediction)?
6. AAPL buy or sell? What is AAPL Finny Score?
7. What are the reasons to buy AAPL? Why should I buy AAPL stock?
8. What are the reasons to sell AAPL? Why should I sell AAPL stock?
9. What are AAPL key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are AAPL earnings?

AAPL trailing 12-month earnings per share (EPS) is $3.28.

2. When is AAPL earnings date?

AAPL earnings date is January 26, 2021.

3. What is AAPL dividend?

AAPL forward dividend is $0.82.

4. What is AAPL dividend yield?

AAPL forward dividend yield is 0.75%.

Analyst Predictions

5. What is AAPL stock forecast (i.e., prediction)?

Based on AAPL analyst price targets, AAPL stock forecast is $123.11 (for a year from now). That means the average analyst price target for AAPL stock is $123.11. The prediction is based on 38 analyst estimates.

The low price target for AAPL is $74.10, while the high price target is $150.00.

AAPL analyst rating is Buy.

Analysis

6. AAPL buy or sell? What is AAPL Finny Score?

#{finnyScore:86}Our quantitative analysis shows 6 reasons to buy and 1 reason to sell AAPL, resulting in Finny Score of 86.

7. What are the reasons to buy AAPL? Why should I buy AAPL stock?

Here are the reasons to buy AAPL stock:

  • Apple's iPhone and iOS operating system have consistently been rated at the head of the pack in terms of customer loyalty, engagement and security, which bodes well for long-term customer retention.
  • Apple is one of the leading players in the wearables market. Apple’s WatchOS features the ability to integrate with Apple Music and has a Siri-integrated interface, along with fitness oriented tech program, GymKit. Furthermore, Apple has also been making some important developments for its voice assistant, Siri, which will now be integrated with iOS 11 with a more natural sounding voice and translation capabilities.
  • Apple’s non-iPhone businesses such as services and wearables, are expected to be growth drivers in the upcoming years. The services portfolio has emerged as the company’s new cash generator. There are more than 420 million paid subscribers across Apple's services portfolio.
  • Apple Pay, designed on the basis of a contactless payment NFC technology, has expanded to more than 50 markets. Apple Pay is adding more users than PayPal, and the number of transactions is skyrocketing (triple-digit growth year-on-year).
  • Apple Music currently has more than 60 million paid subscribers. Apple Music’s availability on Amazon Echo devices, along with its partnership with Verizon is helping the company spread against Spotify in the music business.
  • AAPL stock price ($119.21) is close to the 52-week low ($106.84). Perhaps now is a good time to buy? See AAPL price chart.
  • AAPL quarterly revenue growth was 1.00%, higher than the industry and sector average revenue growth (-1.01% and 0.53%, respectively). See AAPL revenue growth chart.
  • AAPL profitability is improving. The YoY profit margin change was 1.32 percentage points. See AAPL profitability chart.
  • AAPL forward dividend yield is 0.75%, higher than the industry (0.38%) and sector (0.23%) forward dividend yields. See AAPL forward dividend chart.
  • AAPL average analyst rating is Buy. See AAPL analyst rating chart.
  • AAPL cash to debt ratio is 0.74, higher than the average industry (0.15) and sector (0.17) cash to debt ratio. See AAPL cash to debt chart.

8. What are the reasons to sell AAPL? Why should I sell AAPL stock?

Let's look at the reasons to sell AAPL stock (i.e., the bear case):

  • Apple is facing increasing regulatory hassles in Europe and the US. Also, future US immigration and trade policy could have negative ramifications for Apple, which has significant overseas operations and manufacturing partnerships.
  • Apple faces significant competition in most of its operating markets. In the desktop segment, Apple faces intense competition from Hewlett-Packard, Lenovo, Dell, Acer and Asus. In the smartphone segment it competes with Samsung, Xiaomi, Google and many other players.
  • Apple’s excessive dependence on iPhone is a risk to overall growth. Although iPhone revenue has benefited from its higher average selling price (ASP), Apple is declining its market share in China and India because of premium pricing.
  • AAPL Price/Book ratio is 28.28, which is high compared to its industry peers’ P/B ratios. See AAPL forward Price/Book ratio chart.

Key Stats

9. What are AAPL key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for AAPL:

Metrics AAPL
Price $116.58
Average Price Target / Upside $123.11 / 5.60%
Average Analyst Rating Buy
Forward Dividend Yield 0.69%
Industry Consumer Electronics
Sector Technology
Number of Employees 132,000
Market Cap $2,027.63B
Forward P/E Ratio 27.73
Price/Book Ratio 7.39
Revenue (TTM) $274.52B
YoY Quarterly Revenue Growth 1.00%
Profit Margin 20.91%

If you liked this analysis, check out Stock Guides for other stocks.

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