Consumer Electronics
Updated on August 19, 2024, by Mark Pukhov
Apple Inc. is a company that designs, manufactures, and sells smartphones, computers, tablets, wearables, and accessories and related services.
While its performance isn't as remarkable as Tesla or Nvidia,
5Y:
348.20%
176,022.74%
ALL:
it's the third most searched stock on YouTube over the past 12 months, according to Google Trends.
The stock's returns are based on the following:
1. consistently increasing earnings
2. stable profit margins
3. effective management of assets and resources
4. overall good financial health
Apple's PE ratio is slightly above the consumer electronics industry average of 33.42 and exceeds value investors' threshold of 15-20.
apple's
34.42
The stock's PEG ratio is slightly higher than the industry average of 3.06 but surpasses the value investor's threshold of 1.0.
apple's
3.10
Also, Apple's P/FCF ratio is a bit higher than the industry average of 29.50,
apple's
32.94
surpassing the value investor's threshold of 10 by 3 times.
As you've noticed, the KPIs we check aim to determine if the stock is overvalued or undervalued, as the goal of any stock analysis is to assess if it's a good deal.
The fourth KPI, price-to-sales ratio, is too higher than the industry average of 7.15, though it is generally considered good to have P/S less than 2.
apple's
8.91
Apple's price-to-book ratio is the highest among all the companies in the consumer electronics industry,
apple's
51.58
almost twice as large as the industry average of 28.82.
The last KPI that we'll look into is Apple's intrinsic value (IV). The most important thing is that the market price should be lower than the company's intrinsic value.
Apple's market price of $226.05 is 38% higher than its base-case intrinsic value, and sadly, it's even higher than its best-case IV by 9%.
$141.20
$206.16
Combining this with the KPIs we've seen shows that the investment may exceed its actual value, does not offer investors any margin of safety, and is potentially risky.
Investing in Apple carries risks, including:
1. Global and regional economic conditions
2. Unexpected events' potential impact
3. Dependency on suppliers
4. Complex regulations
5. Competition, etc.
Though there are risks, they are not inevitable. Apple is planning to use AI in its products, the same as other tech companies, such as Meta or Google, so let's see what analysts say about this stock.
“... Apple holds a steady position compared to the broader market. There is reason to believe that Apple will succeed in AI innovation....”
#1
“Apple stock has received a consensus rating of buy. The average rating score is Aaa and is based on 70 buy ratings, 24 hold ratings, and 5 sell ratings.”
#2
In conclusion, Apple's stock doesn't look that attractive, but KPIs show that the market has expectations for its shares and future prospects.