Learn more about whether Apple Inc is a good stock to buy or sell based on recent news as well as its key financial metrics. Read on to find out how (AAPL) grades on certain investment factors and determine whether it meets your investment needs.
AAPL Stock Price Movement
As of August 12, 2022 the (AAPL) stock price is $173.17. Over the previous five trading days (AAPL) stock is up 5.0%, compared with being up 15.59% in the past year.
(AAPL) is down -2.5% so far in 2022.
Latest Apple Inc Stock News
As of August 12, 2022, Apple Inc had a $2.7 trillion market capitalization, putting it in the 100th percentile of companies in the Phones & Handheld Devices industry.
Currently, Apple Inc’s price-earnings ratio is 28.4. Apple Inc’s trailing 12-month revenue is $387.5 billion with a 25.7% profit margin. Year-over-year quarterly sales growth most recently was 1.9%. Analysts expect adjusted earnings to reach $6.098 per share for the current fiscal year. Apple Inc currently has a 0.5% dividend yield.
The outlook for this sub-industry for the next year is positive. Despite uncontrollable external factors such as the pandemic and trade wars impacting this sub industry, there are many upcoming opportunities that look to contribute to sustainable growth going forward. 5G devices provide major growth opportunities, as these products, particularly 5G phones pertaining to Apple, have seen a healthy demand that has been much higher than expected. While smartphone-related unit shipments stagnated in 2020, experts predict a 7% to 9% recovery for 2021 and anticipate a 3% increase in 2022, as we see 5G phones become more mainstream and widely accepted by consumers. The average selling price for smartphones is expected to rise in 2021 as a result of this. Furthermore, as schools, businesses, and consumers look to adjust to the post-pandemic era, experts forecast growth of 18% to 20% relating to PCs as people continue to move more of their work and daily activities online. There is also an anticipated increase in demand for wearable devices including smartwatches and wireless headphones, as both are expected to become more mainstream closer and well into 2022.
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Grading Apple Inc Stock
Before you choose to buy, sell or hold Apple Inc stock, you’ll want to analyze how it has been graded. Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, making sense of financial ratios, reading income statements and analyzing recent stock movement. To help individual investors decide whether or not to buy (AAPL) stock, AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way that is suitable for investors of all knowledge levels.
AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for each of five key investing factors: value, growth, momentum, earnings revisions and quality. Here, we’ll take a closer look at Apple Inc’s stock grades for value, growth and quality.
Apple Inc Stock Value Grade
|Price/Free Cash Flow||66||30.5||29.2|
Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. To decide if Apple Inc stock is a buy or sell, you’ll want to evaluate its fair market price or intrinsic value.
Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.
AAII’s A+ Investor Value Grade is derived from a stock’s value score. The value score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.
Stocks with a Value Score from 0 to 20 are considered ultra expensive, those with a score between 21 and 40 are expensive and so on.
Apple Inc has a Value Score of 80, which is Expensive.
Apple Inc Stock Growth Grade
|Sales Growth Qtrly YoY||30||1.9%||13.3%|
|EPS Dil Cont Growth Qtrly YoY||45||(7.7%)||1.6%|
|Operating Cash Growth Qtrly YoY||61||8.5%||(10.5%)|
|Sales Growth Rate 5yr||63||11.1%||9.2%|
|EPS Dil Cont Growth Rate 5yr||68||22.0%||14.1%|
|Operating Cash Growth Rate 5yr||62||9.5%||6.1%|
Growth investing builds on the idea that stocks of companies exhibiting strong, consistent and prolonged growth outperform those of slower-growth companies. AAII measures several dimensions of growth, including year-over-year increases in sales and earnings, long(er)-term historical sales and earnings growth rates and analyst-forecasted long-term earnings growth. Some investors and analysts believe that the stock forecast for Apple Inc is determined by its growth grade.
The components consider a company’s success in growing its sales, earnings per share and operating cash on a year-over-year basis for the latest reported fiscal quarter and on an annualized basis over the last five years. High rates, especially compared to the sector median, lead to better scores.
Apple Inc has a Growth Score of 54, which is Average.
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Apple Inc Stock Momentum Grade
|Relative Price Strength (Q1)||74||7.0%||(4.5%)|
|Relative Price Strength (Q2)||53||(0.3%)||(11.9%)|
|Relative Price Strength (Q3)||93||17.3%||(20.4%)|
|Relative Price Strength (Q4)||43||(5.2%)||(3.9%)|
|Relative Price Strength (weighted 4 qtr)||82||5.1%||(5.9%)|
Momentum grades help uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.
Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.
Apple Inc has a Momentum Score of 82, which is Very Strong.
Other Apple Inc Stock Grades
In addition to Value, Momentum and Growth, A+ Investor also provides grades for Estimate Revisions and Quality and Estimate Revisions,Quality.
The Earnings Estimate Revisions Grade takes into account the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, surprises beget further surprises—or at least continued sales growth (the exact opposite is generally true, too). AAII’s stock screen that follows the companies with the highest earnings estimate revisions (i.e., the best grades) has a 23.3% backtested annual return since inception, whereas an example screen following those with the worst revisions has a backtested annual return since inception of under 5%.
AAII’s A+ Investor Quality Grade comes from the ranking of key metrics. Specifically, the Quality Grade is the percentile rank of the composite return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and F-Score.
These 2 key factors, when combined with the above, provide a holistic view into a stock. Further, by joining A+ Investor you can see whether Apple Inc’s stock passes any of our 60+ stock screens that have outperformed the market since their creation.
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Should I Buy Apple Inc Stock?
Overall, Apple Inc stock has a Quality Grade of A, Earnings Estimate Revisions Grade of C.
Whether or not you should buy Apple Inc stock will ultimately depend on your individual goals, risk tolerance and allocation. AAII can help you figure out both and identify which investments align with what works best for you.
Lastly, it’s important to evaluate a stock by comparing it against others in the same industry. Review the table below to see how Apple Inc stock stands up against its competitors. As you can see, Apple Inc stock is performing better in 2 than its top five competitors.
Apple Inc (AAPL) Competitors
Companies similar to Apple Inc in the Phones & Handheld Devices industry.
Apple Inc Stock: Bottom Line
You can use the information about how Apple Inc stock is graded to determine if you should invest in this specific company. However, you should decide whether Apple Inc stock is a buy, sell or hold based on a combination of grades, metrics, ratios and U.S. Securities and Exchange Commission (SEC) reports.
We encourage investors to do their own due diligence and research through programs of education that teach you to invest for yourself. In this way, you can effectively become a manager of your own wealth—without having to rely on others for your financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.
So, if you’re still on the fence about whether Apple Inc stock is a buy, sell or hold, you can utilize our expansive and robust screening tools like A+ Investor to help make your decision.
A+ Investor adds to its qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions, find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs and understand your portfolio at a more detailed level.
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