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

Zacks Equity Research

Apple (AAPL) closed the most recent trading day at $317.70, moving +0.36% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.03%. Meanwhile, the Dow lost 0.03%, and the Nasdaq, a tech-heavy index, added 0.14%.

Coming into today, shares of the maker of iPhones, iPads and other products had gained 11.36% in the past month. In that same time, the Computer and Technology sector gained 6.3%, while the S&P 500 gained 3.23%.

AAPL will be looking to display strength as it nears its next earnings release, which is expected to be January 28, 2020. On that day, AAPL is projected to report earnings of $4.53 per share, which would represent year-over-year growth of 8.37%. Our most recent consensus estimate is calling for quarterly revenue of $87.74 billion, up 4.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.16 per share and revenue of $275.14 billion. These totals would mark changes of +10.68% and +5.75%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AAPL. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.66% higher. AAPL is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, AAPL is currently trading at a Forward P/E ratio of 24.06. This valuation marks a premium compared to its industry's average Forward P/E of 17.43.

We can also see that AAPL currently has a PEG ratio of 2.29. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Mini computers stocks are, on average, holding a PEG ratio of 3.55 based on yesterday's closing prices.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 117, putting it in the top 46% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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