Apple Inc. (AAPL) Buy or Sell Stock Guide

January 13, 2020

Are you looking for the analysis of Apple Inc. (AAPL) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 8 reasons to buy and 7 reasons to sell AAPL stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about AAPL stock:

  • Is AAPL a buy or a sell?
  • Should I sell or hold AAPL stock today?
  • Is AAPL a good buy / investment?
  • What are AAPL analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy AAPL stock:

1. 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.

2. 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.

3. 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.

4. 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).

5. 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.

6. AAPL profitability is improving. The YoY profit margin change was 1.32 percentage points. See AAPL profitability chart.

7. AAPL forward dividend yield is 1.05%, higher than the industry (0.32%) and sector (0.20%) forward dividend yields. See AAPL forward dividend chart.

8. AAPL average analyst rating is Buy. See AAPL analyst rating chart.

Now that you understand the bull case, let’s look at the reasons to sell AAPL stock (i.e., the bear case):

1. 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.

2. 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.

3. 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.

4. AAPL stock price ($310.33) is close to the 52-week high ($310.95). Perhaps now is a good time to sell? See AAPL price chart.

5. AAPL quarterly revenue growth was 1.80%, lower than the industry and sector average revenue growth (2.30% and 3.66%, respectively). See AAPL revenue growth chart.

6. AAPL Price/Book ratio is 14.42, and it’s high compared to its industry peers’ P/B ratios. See AAPL forward Price/Book ratio chart.

7. AAPL average analyst price target ($273.63) is below its current price ($310.33). See AAPL price target chart.

Now let's look at the key statistics for AAPL:

Metrics AAPL
Price $316.42
Average Price Target / Upside $273.63 / -13.52%
Average Analyst Rating Buy
Forward Dividend Yield 0.97%
Industry Consumer Electronics
Sector Technology
Number of Employees 132,000
Market Cap $1,370.8B
Forward P/E Ratio 20.78
Price/Book Ratio 5.27
Revenue (TTM) $260.17B
YoY Quarterly Revenue Growth 1.80%
Profit Margin 21.24%

What are your thoughts on AAPL?

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

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