by winston » Sat Aug 01, 2020 9:04 pm
not vested
Apple:
Apple's AAPL revenue was $59 billion against estimates of about $52 billion, with a 19% beat of iPhone expectations.
Some iPhone delays are expected for the usually strong September quarter, but the solid reported quarter reflects that demand is strong even during the pandemic and store closures. iPhone revenue grew for the year. iPhone demand and China has rebounded significantly.
And following Qualcomm's QCOM strong 5G guide this week for the full year, most investors are comfortable trusting the multi-year 5G growth cycle is intact.
Services revenue was just over $13 billion, and grew 15% year-over-year. This was not a resounding result against expectations, which were rising as stay-at-home orders were a positive for app store activity.
The gross margin expanded to 67% from 64% in the trailing 12-month period, helping boost the earnings per share figure.
Investors had already been well aware of the higher margin services business. Apple may need to prove itself more on services to sustain its current valuation, although the somewhat breath-taking iPhone results did enable analysts to lift their price targets.
Earnings per share was $2.58, above estimates of $2.05, with the actual results up 25%.
Most analysts are lifting 2021 earnings estimates and therefore their price targets. The stock rose 7.5% to $413 a share. It's now trading at about 27 times 2021 EPS estimates, slightly high for where it has traded for most of this year.
With lifted estimates, the multiple will fall back some, but some would say the stock is fully priced. Catalysts to move the stock would be earnings growth for the near future and continued strength in services, wearables and 5G.
Source: The Street
It's all about "how much you made when you were right" & "how little you lost when you were wrong"