Apple Inc. (AAPL) Buy or Sell Stock Guide

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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 13 reasons to buy and 11 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. Between first-time smartphone buyers, users switching from Android, and repeat sales to current customers, Apple has plenty of opportunity to reap the rewards of its iPhone business.

2. 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.

3. We think Apple is still innovating with introductions of Apple Pay, Apple Card, Apple Watch, Apple TV, and AirPods, each of which could drive incremental revenue but, more important, help to retain iPhone users over time.

4. Although demand for Apple's mega edition – iPhone X – has been less satisfactory, the device plays an important role in expanding the iOS ecosystem. The device also plays a crucial part in Apple’s expansion strategy in emerging markets (India and China in particular).

5. Apple has been taking a lot of initiatives to boost its presence in India. The country presents an attractive growth opportunity for the company over the long run given its younger population and increasing investment in 4G networks infrastructure. Apple has partnered with a telecom company Reliance, which will be providing an all-IP network service for free to its iPhone customers.

6. China remains an important market for Apple, given the growing number of middle-class customers. Though the last few quarters have been marked by sluggish growth, the company remains optimistic about the long-term growth prospects of the region.

7. Apple Pay, designed on the basis of a contactless payment technology has been expanded to 20 markets that include Denmark, Finland, Sweden and the UAE, Italy, the UK, Australia, Canada, China, Hong Kong, Switzerland, Japan, Russia, New Zealand, Spain Ireland, and Taiwan.

8. 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.

9. Apple is preparing to enter the automobile market as well. In June 2017 the company confirmed that it was working on a self-driving car technology AI project. In this regard, we are optimistic about the company’s $1 billion investment in Didi Chuxing.

10. Apple is focused on the development of AR/VR technologies, which could present lucrative business opportunities in the long run.

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

12. AAPL forward dividend yield is 1.24%, higher than the industry (0.30%) and sector (0.19%) forward dividend yields. See AAPL forward dividend chart.

13. 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’s recent decisions to maintain a premium pricing strategy may help fend off gross margin compression but could limit unit sales growth as devices may be unaffordable for many emerging-market customers.

2. If Apple were to ever launch a buggy software update or subpar services like Apple Maps, it could diminish the firm's reputation for building products that "just work."

3. Future U.S. immigration and trade policy could have negative ramifications for Apple, which has significant overseas operations and manufacturing partnerships.

4. Apple faces significant competition in most of its operating markets. In the desktop and portable computer segment, Apple faces intense competition from the market leader Hewlett-Packard and the likes of Lenovo, Dell, Acer, and Asus. The smartphone segment is chock-a-block with attractive devices from Samsung, Xiaomi, Google, Oppo and other small and big players that are intensifying competition aganst Apple.

5. Apple is entangled in various legal battles over its mobile and tablet products. In the beginning of 2017, Apple and Qualcomm saw a major fallout related to licensing royalty payments. Apple has filed a $1 billion lawsuit against Qualcomm, accusing it of overcharging for chips and refusing to pay around $1 billion in promised rebates.

6. Apple is facing increasing regulatory hassles in Europe and the US. Under the Trump administration, the big tech continues to face a lot of pressure.

7. AAPL stock price ($262.20) is at the 52-week high. Perhaps now is a good time to sell? See AAPL price chart.

8. AAPL quarterly revenue growth was 1.80%, lower than the industry and sector average revenue growth (2.45% and 3.68%, respectively). See AAPL revenue growth chart.

9. AAPL Price/Book ratio is 12.56, and it’s high compared to its industry peers’ P/B ratios. See AAPL forward Price/Book ratio chart.

10. AAPL PEG ratio (P/E adjusted for growth) is 1.95, and it’s high compared to its industry peers’ PEG ratios. See AAPL PEG chart.

11. AAPL average analyst price target ($251.93) is below its current price ($262.20). See AAPL price target chart.

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

Metrics AAPL
Price $262.77
Average Price Target / Upside $251.93 / -4.13%
Average Analyst Rating Buy
Industry Consumer Electronics
Sector Technology
Number of Employees 132,000
Market Cap $1186.92B
Forward P/E Ratio 17.65
Price/Book Ratio 4.56
PEG 2.06
Revenue (TTM) $260.17B
YoY Quarterly Revenue Growth 1.8%
Profit Margin 21.24%

What are your thoughts on AAPL?

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