Should you buy Apple stock? 3-minute analysis
- 7 months ago
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So far in 2022, Apple stock has outperformed its rivals. Shares are down only 15% YTD, while Alphabet is down 37%, Amazon is down 42% and Meta is down 72%.
Right now, the company has a market cap of 2.43 trillion dollars with 48 billion of cash including 25 billion in marketable securities.
For perspective, Apple’s market cap is bigger than the GDP of Canada.
Over the last 12 months, the company made 394.3 billion in revenue, 99.8 billion in net income and $6.11 cents earnings per share.
Revenue was up 7.8% year over year. Net income was up 5.4% and thanks to a strong buyback scheme, earnings per share increased 9%.
That means Apple stock is now valued at 6.4 times revenue and 25 times earnings. The company also pays a dividend of 0.6% and it repurchased $89.4 billion of its own stock in 2022.
In last week’s annual report Apple showed healthy product sales for 2022::
Iphone sales were up 7.2% to 206 billion
Mac sales were up 14% to 40 billion
Wearables were up 7.3% to 41 billion
Services were up 14% to 78 billion
And Ipad sales were down -8% to 29 billion.
Considering Apple’s dominance it's not surprising to see its stock outperform. Apple is also seen as a relative safe haven versus volatile growth stocks, bonds and foreign markets.
However, there are also risks to owning Apple stock.
US-China trade relations are disrupting Apple’s manufacturing. In one example the company has had to halt its plan to use China’s YMTC memory chips and tensions like these show no sign of easing.
Also, Apple’s PE ratio at 25, is still 30-40% above its long term average. That would be ok if Apple was growing quickly but as we saw Apple grew revenue only 7% in 2022 and net income only 5%. Apple will find it difficult to grow fast because of its size and new projects like electric cars seem risky. Furthermore, Apple’s sheer dominance will draw the attention of regulators.
That said, Apple maintains a strong brand and its earnings per share is supported by share buybacks.
So far in 2022, Apple stock has outperformed its rivals. Shares are down only 15% YTD, while Alphabet is down 37%, Amazon is down 42% and Meta is down 72%.
Right now, the company has a market cap of 2.43 trillion dollars with 48 billion of cash including 25 billion in marketable securities.
For perspective, Apple’s market cap is bigger than the GDP of Canada.
Over the last 12 months, the company made 394.3 billion in revenue, 99.8 billion in net income and $6.11 cents earnings per share.
Revenue was up 7.8% year over year. Net income was up 5.4% and thanks to a strong buyback scheme, earnings per share increased 9%.
That means Apple stock is now valued at 6.4 times revenue and 25 times earnings. The company also pays a dividend of 0.6% and it repurchased $89.4 billion of its own stock in 2022.
In last week’s annual report Apple showed healthy product sales for 2022::
Iphone sales were up 7.2% to 206 billion
Mac sales were up 14% to 40 billion
Wearables were up 7.3% to 41 billion
Services were up 14% to 78 billion
And Ipad sales were down -8% to 29 billion.
Considering Apple’s dominance it's not surprising to see its stock outperform. Apple is also seen as a relative safe haven versus volatile growth stocks, bonds and foreign markets.
However, there are also risks to owning Apple stock.
US-China trade relations are disrupting Apple’s manufacturing. In one example the company has had to halt its plan to use China’s YMTC memory chips and tensions like these show no sign of easing.
Also, Apple’s PE ratio at 25, is still 30-40% above its long term average. That would be ok if Apple was growing quickly but as we saw Apple grew revenue only 7% in 2022 and net income only 5%. Apple will find it difficult to grow fast because of its size and new projects like electric cars seem risky. Furthermore, Apple’s sheer dominance will draw the attention of regulators.
That said, Apple maintains a strong brand and its earnings per share is supported by share buybacks.