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Apple (AAPL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Apple (AAPL) closed at $108.22, marking a +1.03% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.3%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 0.37%.

Heading into today, shares of the maker of iPhones, iPads and other products had lost 15.34% over the past month, lagging the Computer and Technology sector's loss of 5.52% and the S&P 500's loss of 5.02% in that time.

AAPL will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.69, down 9.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $63.72 billion, down 0.51% from the year-ago period.

AAPL's full-year Zacks Consensus Estimates are calling for earnings of $3.24 per share and revenue of $273 billion. These results would represent year-over-year changes of +9.09% and +4.93%, respectively.

It is also important to note the recent changes to analyst estimates for AAPL. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.19% higher within the past month. AAPL is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that AAPL has a Forward P/E ratio of 33.09 right now. This represents a premium compared to its industry's average Forward P/E of 9.

Investors should also note that AAPL has a PEG ratio of 3.01 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Mini computers was holding an average PEG ratio of 3.01 at yesterday's closing price.

The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 36, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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