Apple Stock: Buy, Sell, or Hold? The Motley Fool Leave a comment

We’re forecasting iPhone revenue will increase by 19%, consisting of a 15% increase in unit sales and nearly 4% increase in the average selling price. You can find a stock’s P/E ratio by dividing the stock’s share price by its earnings per share (EPS). EPS is the amount of money each individual share of a company is worth, based on the company’s current profits. Many investors buy Apple stock as part of an index fund, which is a collection of investments wrapped together.

The Class C shares, which trade as FWONK, are the best bet for most investors. They directly track the performance of the Formula One Group without voting rights, so shareholders can sit back without worrying about weighing in on corporate issues, which are sometimes complex. Amid sales of the iPhone and other products, Apple remains a long-term buy.

The rise of services is positive as it can aid in safeguarding the company in the event of poor iPhone sales, which look to be a real possibility in Apple’s latest lineup. Apple (AAPL -1.03%) is one of the most innovative companies to date. Investing in Apple has felt like a no-brainer as its consistently successful products seem to make the company unstoppable.

More stock ideas can be found on IBD’s Leaderboard, MarketSmith and SwingTrader platforms. Apple has an installed base of more than 2 billion devices in use today, including well over 1 billion iPhones. First, it ignited the personal computer revolution in the 1970s with the Apple II. Apple shares fell in early September after China review a random walk down wall street banned central government officials from using iPhones and other foreign-branded phones. China cited national security concerns for the move, but it comes amid heightened trade tensions between the U.S. and China. Vision Pro is part of Apple’s push into the wearables market, following the success of the Apple Watch and AirPods.

What you have to believe to justify the high valuation that the market is placing on Apple’s stock. Suva reiterated a buy rating on Apple with $175 price target, which assumes about 30% upside from current levels. Lululemon achieved its digital and men’s goals ahead of schedule in fiscal 2021, even as it temporarily closed its stores during the pandemic, and surpassed its international target in fiscal 2022. It reiterated those targets during its latest conference call in August. It’s probably a good idea to follow the Oracle of Omaha’s lead here and also make Apple one of your top holdings.

  • However, the stock has also risen significantly this year, and its earnings multiple has surged to multi-year highs.
  • But according to Sports Illustrated (which cites Business F1 Magazine), $2.8 trillion tech giant Apple could enter the F1 broadcast scene with a bang.
  • The Relative Strength Rating shows how a stock’s price performance stacks up against all other stocks over the last 52 weeks.
  • Apple shares have dipped 9% in the same period, with many of its peers experiencing similar declines.
  • The Style Scores are a complementary set of indicators to use alongside the Zacks Rank.
  • You can find them on Apple’s investor relations site or by searching the SEC’s database.

Current Cash Flow Growth measures the percent change in the year over year Cash Flow. Cash Flow is net income plus depreciation and other non-cash charges. A strong cash flow is important for covering interest payments, particularly for highly leveraged companies. The PEG ratio is the P/E ratio divided by its long-term growth rate consensus. This ratio essentially compares the P/E to its growth rate, thus, for many, telling a more complete story than just the P/E ratio alone.

Apple could add rocket fuel to the Formula 1 growth story

However, tech is an ever-expanding industry that grants innovative companies consistent gains over the long term. As one of the biggest names in the market, Apple shares are an attractive investment for patient buyers. The services segment is vital because it generates higher profit margins than the product segment. In its most recent quarter, the gross profit margin for the product segment was 36.4%, while for the services segment, it was 72.6%.

The best moment to buy AAPL stock is whenever you have the cash in the bank and can afford to hold it for 3-5 years. As I touched on earlier, fans are more engaged than ever, with behind-the-scenes access across broadcast coverage, social media, and Netflix’s Drive to Survive series. The latter program first aired in 2019 and covered the action from the 2018 season, including significant amounts of footage fans wouldn’t normally see in the live broadcast each weekend. It turned a fast-paced sport into a mix of drama and comedy, reeling in hordes of new enthusiasts. A number of the world’s largest automotive giants are already involved in F1, from Mercedes-Benz to Ferrari to Aston Martin. But thanks to the sport’s growth — especially in the U.S. — other manufacturers are racing to get in on the action.

  • Even with sluggish iPhone sales, Apple has been a free-cash-flow (FCF) machine.
  • But whether Apple, or any other stock, deserves space in your portfolio will depend on your financial situation, current holdings and investment goals.
  • Though it’s exciting to buy shares of an individual company, especially a big name like Apple, you should take a moment to do your due diligence.
  • The digital ecosystem revolves around the Apple App Store which lists thousands of games and applications for iOS users.

Such activity could force investors to question whether they should continue to add positions in the tech giant or take some cash off the table. A company with an ROE of 10%, for example, means it created 10 cents of assets for every $1 of shareholder equity in a given year. Seeing how a company makes use of its equity, and the return generated on it, is an important measure to look at. ROE values, like other values, can vary significantly from one industry to another. While the one year change shows the current conditions, the longer look-back period shows how this metric has changed over time and helps put the current reading into proper perspective. Also, by looking at the rate of this item, rather than the actual dollar value, it makes for easier comparisons across the industry and peers.

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It’s another great way to determine whether a company is undervalued or overvalued with the denominator being cash flow. The Momentum Scorecard focuses on price and earnings momentum and indicates when the timing is right to enter a stock. The game-changing smartphone, which debuted in 2007, sparked years of massive growth and created a loyal base of customers willing to buy Apple products and services. In the June quarter, Apple’s services revenue increased 8.2% year over year to $21.21 billion.

Less than 1 means its liabilities exceed its short-term assets (cash, inventory, receivables, etc.). Like most ratios, this number will vary from industry to industry. Debt to Equity (or D/E ratio) is total liabilities divided by total shareholder equity. 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.

However, if Apple’s share price increases over the next 10 years at a rate comparable to the last 10, then a single share of Apple—barring stock splits—could be worth more than $1,000. To evaluate the performance of Apple or other stocks, start by looking at the annualized percent return. This will give you a number you can compare to other investments as you gauge how well your investment performed. You may also want to revisit the fundamental data you looked at earlier to see how it develops over time. You can find them on Apple’s investor relations site or by searching the SEC’s database.


By looking at those benchmarks, you can get an idea of how your investment is performing relative to certain industries or the market as a whole. Fees, services and investment options can vary by broker, so compare multiple brokerages to find the right one for you. If you’re not sure where to start, check out our picks for the best online brokers. According to Bloomberg, the tech giant plans to debut a partially self-driving car by 2026.

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While a potential dip is concerning, the company has proven itself as an innovative company worth investing in over time. The stock may be even more of a buy in the case of a dip as it is unlikely to be down for long, suggesting current investors continuous delivery: a maturity assessment model would do well to hold until shares rise again. The tech giant’s success over the years has seen its stock soar 900% over the last decade. For some companies, that kind of growth could suggest its shares don’t have much to offer new investors.

Research the fundamentals of Apple stock

All of those weaknesses made it an easy target for the bears in a high interest rate environment. Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.

Evaluate Apple’s Financial Health

Because investment funds own hundreds or even thousands of different stocks, they’re generally considered less risky than owning individual stocks while still offering solid long-term returns. Eventually, the time will come for you to cash out and hopefully see a tidy profit on your investment. review derivatives essentials Whether you’re an Apple fanboy or you can’t quit your Android, there’s no denying Apple Inc’s (AAPL) power in the stock market. Over the past five years, AAPL has returned better than 270% to its investors. In 2018, Apple became the first company to reach a market cap of $1 trillion.

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