Apple AAPL shares helped Nasdaq reach new highs this week and the company reached its own highs on Friday, heading for the release of its first fiscal 2021 quarter results on Wednesday, January 27. and analysts are excited about their newest iPhone.
Continuous Domination
Apple needs no introduction as it continues to expand steadily, going beyond iPhones for services and more. But despite its successful diversification, its flagship smartphones still play a vital role in the company and on Wall Street, and accounted for 50% of total revenue in fiscal 2020.
Fortunately, Wall Street is at the top with its first 5G-compatible iPhone, launched in October. The iPhone is available in four models in various price ranges. Apple has the price of its most sophisticated models almost equal to last year’s iPhone 11, despite new features and 5G capabilities. And Morgan Stanley analyst Katy Huberty called the iPhone 12 “Apple’s most successful product launch in the past five years.”
Apple also benefited from stronger Mac and iPad sales during remote work and school environments. And its wearable unit, which includes its popular smartwatch and wireless headphones, has also grown, up 25% last year, to overcome the expansion of its core services unit by 16%.
Apple now has revenue streams from its huge App Store, subscription services like competitor Spotify SPOT, Apple Music, as well as its TV streaming service that hopes to someday compete with Netflix NFLX and others. The company also offers news, video games and more.
Apple’s paid subscriptions increased by more than 35 million sequentially to reach more than 585 million subscriptions on its various services in the last quarter. And executives expected to reach a total of 600 million before the end of the 2020 calendar year.
Before proceeding, it is also worth remembering that Apple is increasingly striving to bring more of its chips in-house. The change is designed to help cut costs and improve battery life and performance, as it continues to cycle and diversify. There are even reports that Apple is trying to break into the electric vehicle space.
Have more
Apple’s ambitious plans may go even further, as it ended the last quarter with about $ 80 billion in net cash. The company has been slowly reducing its cash position to try to achieve “a neutral net cash position over time”. In the last quarter, it returned about $ 22 billion to shareholders through dividends and repurchases – its dividend yield is at 0.60% now.
Apple also remains the most valuable brand in the world and its share price has surpassed Microsoft MSFT and Amazon AMZN over the past five years, up 460%. More recently, its shares have risen 75% in the past year and 22% in the past three months.
Apple is trading at 7.1 times future 12-month sales. This represents only a small premium for your industry and represents a solid discount for Microsoft’s 10.2X, as it has for years. And AAPL’s 4-by-1 stock split in late summer made it more accessible and attractive to many investors.
Result
The pandemic forced Apple to postpone the launch of its next-generation iPhone until October and not until the end of September. This will help to slightly boost sales for the first quarter of fiscal 2021, as it goes against an easier period to compare.
Zacks estimates Apple’s adjusted first quarter earnings to rise by more than 11% to $ 1.39 per share, at nearly 12% of strong revenue that would make it pull out more than $ 100 billion in a single quarter for the first time. , in US $ 102.6 billion.
Apple’s 2021 tax revenue is projected to increase 17%, with its adjusted earnings being 23% higher. And positive reviews of AAPL’s long-term earnings help it achieve a Zacks Rank # 2 (Buy) now.
There are always risks in trading a stock for short-term gains around profits, especially when it reaches new highs towards profits. That said, long-term investors should not worry about trying to time Apple if they are optimistic about its counted success.
More stock news: this is bigger than the iPhone!
It can become the mother of all technological revolutions. Apple has sold just 1 billion iPhones in 10 years, but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $ 1.7 trillion market.
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