P/E Ratio
The current P/E ratio for Apple is 26.13, which is notably higher than the industry’s P/E ratio (20.76). Apple’s P/E ratio is also substantially lower than the 34.98 industry average. This indicates that, in comparison to the industry, particularly competitors in the company’s sector, investors who buy the stock are paying less for each dollar of profits than they would if they invested in other businesses in the industry, particularly in the Apple sector (“Apple Financial Reports,” 2021). As a result, the stock is undervalued in comparison to the industry average. This indicates that an investor should consider buying Apple stocks above other assets in the industry. The P/E ratio overall is a marker of whether a firm’s earnings justify the price of its stocks.
Book Value of Shares
Book Value /Share = (Total Shareholders’ Equity- Preferred Stock)/Outstanding Shares.
The current book value per share for Apple resides at 4.1. Market value per share, however, remains at 145.85 as of the second half of September 2021. The book value per share of a firm may not be a fair reflection of its underlying worth. This is due to the fact that a company’s assets can be carried on the balance sheet at their original values less depreciation (Bloom & Franck, 2018). As a result, the true economic worth of the company’s assets is underestimated. This is especially true for Apple, where the market price per share and the book price per share diverge by about $140.
Analysis Reports Summaries
Most financial analysts believe that Apple’s stock is performing well and is expected to continue to do so owing to the company’s strong performance. Shareholders should keep their Apple stock, according to Deutsche Bank analysts. The company’s profits per share have topped estimates by $0.18, according to these experts. Citigroup analysts are urging investors to purchase Apple stock. Apple Inc.’s stock, according to these experts, has already shaken off its bearishness and is poised to trade at higher levels (Li, 2021). According to these investors, the company’s service sector has grown by 31% year over year, and the company’s development into new countries will continue to drive the company’s value up.
Goldman Sachs analysts, for one, believe the stock will continue to rise. However, they forecast a little increase in the average selling price in the following quarter. Bank of America financial experts, for example, advises investors to buy Apple shares. According to these analysts, the selling prices of iPhones are rising owing to increased demand, resulting in a bigger margin. Morgan Stanley analysts estimate that the company’s worth will continue to rise by over $1 trillion. The company’s solid macro environment, combined with a strong consumer base, will propel growth across the board.
Apple (AAPL) has released its fiscal Q3 2021 financial report, which covers the months of April, May, and June. Apple reported $81.43 billion in sales for the quarter, up 36% year over year, and $21.74 billion in profit. It has a $1.30 earnings-per-share figure. This compared to the company’s $59.7 billion in revenue and $11.25 billion profit in the same quarter the previous year. Because of the COVID-19 pandemic, Apple did not offer a forecast for Q3 2021, although analysts still had high hopes. Even the most pessimistic of them predicted a significant revenue increase, as we outlined earlier this week. The low estimate was $65.68 billion, while the high estimate was $77.15 billion (“Apple Financial Reports,” 2021). Thus, considering its overall results, the firm has outperformed its own best-prognosed results, indicating the firm’s drastic financial success.
References
Apple Financial Reports. (2021). Finance.yahoo.com.
Bloom, M. & Franck, T. (2018). Apple’s ‘path to trillion intact:’ Every major Wall Street analyst on the iPhone maker’s earnings report.
Li, Y. (2021). Apple Inc. Analysis and forecast evaluation. Proceedings of Business and Economic Studies, 4(4), 71-78.