Apple Inc Stock Intrinsic Value – Loop Capital Downgrades Apple Stock to ‘Hold’ Due to Revenue Risks in Q2
May 23, 2023
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Apple Inc ($NASDAQ:AAPL). is one of the world’s leading technology companies, responsible for the production of a wide range of devices, including the iPhone, iPad, and Mac. The company’s stock has been a key part of its success, with its share price rising steadily over the years, leading to many investors looking to take advantage of this growth.
However, Loop Capital has recently downgraded their forecast of Apple’s revenue for the June quarter due to the potential downside risk. Loop Capital is a leading financial services firm that offers equity research and trading, as well as other financial solutions to their clients. Recently, they downgraded Apple’s stock to ‘Hold’ due to their assessment that the company could experience a revenue decline in the June quarter. This is largely due to the current economic situation, as well as potential issues with demand for Apple’s products. As a result, Loop Capital believes that investors should be cautious when considering Apple’s stock in the coming months. Although Loop Capital has downgraded Apple’s stock to ‘Hold,’ the company is still expected to deliver strong performance in the long-term. Their products have consistently been well-received by consumers, and their financial position remains strong. As such, there is still potential for investors to benefit from Apple’s stock in the future, despite the current risks.
Earnings
Loop Capital downgraded APPLE INC stock to ‘Hold’ due to revenue risks in Q2 of FY2023. According to their earning report as of March 31 2023, APPLE INC earned 94.84B USD in total revenue and 24.16B USD in net income. Compared to the previous year, there was a 2.5% decrease in total revenue and a 3.4% decrease in net income.
However, over the last 3 years, APPLE INC has seen an increase in total revenue, from 89.58B USD to 94.84B USD. In light of this, Loop Capital believes that there may be risks associated with the company’s future revenue.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Apple Inc. More…
| Total Revenues | Net Income | Net Margin |
| 385.1k | 94.32k | 24.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Apple Inc. More…
| Operations | Investing | Financing |
| 109.58k | 3.89k | -115.53k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Apple Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 332.16k | 270k | 3.95 |
Key Ratios Snapshot
Some of the financial key ratios for Apple Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 12.8% | 19.6% | 29.9% |
| FCF Margin | ROE | ROA |
| 25.3% | 121.1% | 21.7% |
Price History
On Monday, Apple Inc. stock opened at $174.0 and closed at $174.2, down by 0.5% from its prior closing price of 175.2. Loop Capital expressed concern that Apple’s iPhone shipments may not reach the projected level, which could cause the company to fall short of the expected revenue for the quarter. The firm also noted that Apple’s services revenue could decelerate in the near future, further affecting the company’s revenue for the second quarter. Live Quote…
Analysis – Apple Inc Stock Intrinsic Value
At GoodWhale, we recently conducted an analysis on the wellbeing of APPLE INC. Our proprietary Valuation Line indicated that the fair value of an APPLE INC share was around $158.4. However, at the moment it is being traded at $174.2, a fair price that is overvalued by 9.9%. This means that it is currently an expensive stock to purchase. We recommend that investors be aware of the risk involved in buying an overvalued stock. More…
Peers
The competition between Apple Inc and its competitors, Cisco Systems Inc, Microsoft Corp, and Sony Group Corp, has been intense over the years. All of these companies have been competing to offer the best products and services to their customers. Each of them has been striving to create innovative solutions that will stay ahead of the competition. As a result, consumers have been the ultimate beneficiaries of this competition as they have access to cutting-edge technologies and products.
– Cisco Systems Inc ($NASDAQ:CSCO)
Cisco Systems Inc is a multinational technology company that designs, manufactures and sells networking equipment. As of 2023, the company has a market capitalization of 199.94 billion dollars, which makes it one of the largest technology companies in the world. Furthermore, its Return on Equity (ROE) stands at 23.05%, which is an indication of its impressive financial performance. Cisco Systems Inc has been successful in providing cutting-edge technological solutions and services to its customers, while maintaining a healthy financial footing.
– Microsoft Corp ($NASDAQ:MSFT)
Microsoft Corporation is a multinational technology company that develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services. Founded in 1975, Microsoft is one of the world’s leading companies in corporate technology. With a market cap of 1.84T as of 2023, Microsoft is one of the most valuable companies in the world. Microsoft’s Return on Equity (ROE) of 29.64% is also one of the highest rates in the corporate sector. This indicates that the corporation has been able to effectively utilize its equity to generate income and maximize shareholder wealth.
– Sony Group Corp ($TSE:6758)
Sony Group Corp is a leading multinational conglomerate corporation based in Japan. The company is engaged in the development, design, manufacture, and sale of electronic equipment, instruments, and devices for consumer, professional and industrial markets. As of 2023, Sony Group Corp has a market cap of 14.3T, making it one of the largest companies in the world. Additionally, the company has a Return on Equity (ROE) of 10.9%, which is an indication of its strong financial performance and profitability.
Summary
Apple Inc. is facing revenue downside risk for the June quarter, according to Loop Capital’s investing analysis. The firm believes that the iPhone maker’s performance in the short-term could be affected by economic uncertainty, supply chain disruptions, and increased competition from other tech giants. Additionally, Loop Capital predicts that Apple’s services business, such as iCloud and Apple Music, will not be able to make up for any losses in device sales. They suggest that investors should proceed with caution and expect to see a decrease in revenue for the next quarter.
