U.S. markets open in 6 hours 25 minutes

What Does Apple Inc.'s (NASDAQ:AAPL) Share Price Indicate?

Simply Wall St

Apple Inc. (NASDAQ:AAPL) saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Apple’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Apple

What is Apple worth?

The stock is currently trading at US$227 on the share market, which means it is overvalued by 21% compared to my intrinsic value of $187.27. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that Apple’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Apple look like?

NasdaqGS:AAPL Past and Future Earnings, October 8th 2019

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -1.3% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Apple. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? If you believe AAPL is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on AAPL for a while, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Apple. You can find everything you need to know about Apple in the latest infographic research report. If you are no longer interested in Apple, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.