Apple (AAPL) AI Stock Analysis

• Market Cap: $2.83T
• Dividend Yield: 0.53%
• Average Volume (3M): 55.27M
• Price to Earnings (P/E): 29.9
• Beta (1Y): 1.08
• Revenue Growth: 2.61%
• EPS Growth: -2.14%
• Country: US
• Employees: 150,000
• Sector: Technology
• Sector Strength: 40
• Industry: Consumer Electronics
• EPS (TTM): 6.29
• Shares Outstanding: 15,022,073,000
• 10 Day Avg. Volume: 55,676,942
• 30 Day Avg. Volume: 55,265,601
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 8.28
• Price to Cash Flow (P/CF): 27.40
• P/FCF Ratio: 27.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $247.28
• Price Target Upside: 36.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 32

Apple's stock is supported by strong financial performance and a positive earnings call, reflecting robust profitability and growth in key areas. However, the high P/E ratio suggests the stock is priced at a premium, and technical indicators point to potential short-term weakness. Challenges in China and a decrease in wearables revenue are areas to monitor, but overall, Apple's financial stability and strategic growth initiatives bolster its stock performance.

Positive Factors

Product Availability

Apple recently announced availability of the Apple TV App on Android mobile devices, potentially increasing subscription revenue by making Apple TV+ more readily available.

Resilience

Maintain Buy on Apple on stable cash flows, earnings resiliency, and potential beneficiary of AI use on edge devices.

Services Revenue

Services revenue estimate shows 12% year-over-year growth in F2Q25.

Negative Factors

China Market Risk

Greater China represents 17% of Apple's revenue, and there is a risk that China could pressure its citizens to avoid Apple products.

Financial Performance

Assuming a 34% tariff rate, Apple's gross margins and EPS are expected to decrease significantly.

Tariffs

New reciprocal tariff rates are set at 34% for China, 26% for India, and 46% for Vietnam, which could impact Apple's costs.

Apple Business Overview & Revenue Model

Company Description

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod. It also provides AppleCare support and cloud services; and operates various platforms, including the App Store that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts, as well as advertising services include third-party licensing arrangements and its own advertising platforms. In addition, the company offers various subscription-based services, such as Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property. The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets. It distributes third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. Apple Inc. was founded in 1976 and is headquartered in Cupertino, California.

How the Company Makes Money

Apple Inc. generates revenue through a combination of product sales and services. The majority of its income comes from hardware sales, particularly the iPhone, which consistently contributes the largest portion of its total revenue. Other significant hardware sources include the Mac, iPad, and wearables like the Apple Watch. Beyond hardware, Apple has been increasingly focusing on its Services segment, which includes revenue from the App Store, Apple Music subscriptions, iCloud storage services, AppleCare, and Apple Pay. This diversification into services has provided a steady, recurring revenue stream that complements its hardware sales. Additionally, Apple's ecosystem strategy encourages consumer loyalty and cross-product usage, further driving sales and service revenue. Strategic partnerships, such as with telecommunications companies for iPhone distribution, also play a crucial role in expanding Apple's market reach and boosting sales.

Apple Financial Statement Overview

Summary

Apple's financial statements show strong profitability with a Gross Profit Margin of 46.5% and a Net Profit Margin of 24.3%. The company has a low Debt-to-Equity Ratio of 0.03 and a strong Free Cash Flow of $101.2 billion, indicating excellent financial health despite moderate revenue growth.

Income Statement

Apple demonstrates strong profitability with a consistent Gross Profit Margin of around 46.5% in TTM, showcasing operational efficiency. The Net Profit Margin stands at 24.3% for TTM, highlighting effective cost management. Revenue growth has been modest, with a TTM increase over the previous annual period. EBIT and EBITDA margins remain robust, indicating healthy operating earnings before interest and taxes.

Balance Sheet

Apple's balance sheet is solid with a low Debt-to-Equity Ratio of 0.03 in TTM, indicating conservative leverage. The Return on Equity is strong at 144.0%, reflecting efficient equity utilization. The Equity Ratio is 19.4%, suggesting a moderate reliance on equity financing. However, fluctuating equity levels could pose potential risks.

Cash Flow

Apple shows a healthy cash flow situation with a strong Free Cash Flow of $101.2 billion in TTM. The Operating Cash Flow to Net Income Ratio is 1.13, indicating efficient cash conversion. Despite a decrease in Free Cash Flow compared to the previous period, the company maintains solid cash generation capabilities.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
395.76B	391.04B	383.29B	394.33B	365.82B	274.51B
	Gross Profit
184.10B	180.68B	169.15B	170.78B	152.84B	104.96B
	EBIT
125.67B	123.22B	114.30B	119.44B	108.95B	66.29B
	EBITDA
137.35B	134.66B	125.82B	130.54B	120.23B	77.34B
	Net Income Common Stockholders
96.15B	93.74B	97.00B	99.80B	94.68B	57.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
23.16B	65.17B	61.55B	48.30B	62.64B	90.94B
	Total Assets
57.06B	364.98B	352.58B	352.75B	351.00B	323.89B
	Total Debt
0.00	106.63B	111.09B	132.48B	136.52B	122.28B
	Net Debt
-10.02B	76.69B	81.12B	108.83B	101.58B	84.26B
	Total Liabilities
17.71B	308.03B	290.44B	302.08B	287.91B	258.55B
	Stockholders Equity
39.35B	56.95B	62.15B	50.67B	63.09B	65.34B
Cash Flow		Free Cash Flow
98.30B	108.81B	99.58B	111.44B	92.95B	73.36B
	Operating Cash Flow
108.29B	118.25B	110.54B	122.15B	104.04B	80.67B
	Investing Cash Flow
10.80B	2.94B	3.71B	-22.35B	-14.54B	-4.29B
	Financing Cash Flow
-130.77B	-121.98B	-108.49B	-110.75B	-93.35B	-86.82B

Apple Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 181.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAPL, the sentiment is Negative. The current price of 181.46 is below the 20-day moving average (MA) of 214.26, below the 50-day MA of 228.14, and below the 200-day MA of 228.47, indicating a bearish trend. The MACD of -3.21 indicates Negative momentum. The RSI at 48.12 is Neutral, neither overbought nor oversold. The STOCH value of 68.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AAPL.

Apple Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SONY	79 Outperform	$138.55B	17.70	14.40%	0.41%	1.77%	18.85%
AAPL	74 Outperform	$2.83T	29.95	136.52%	0.53%	2.61%	-2.14%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%
LPL	52 Neutral	$2.83B	―	-37.33%	―	19.52%	24.03%

Apple Corporate Events

Apple Appoints Kevan Parekh as New CFO

Apple has appointed Kevan Parekh as its new Chief Financial Officer, effective January 1, 2025, succeeding Luca Maestri. Parekh, who joined Apple in 2013, has held several senior roles within the company and brings experience from previous positions at Thomson Reuters and General Motors. He will receive a salary of $1 million and is eligible for the Executive Cash Incentive Plan. Parekh has been awarded both performance-based and time-based restricted stock units, with vesting linked to Apple’s shareholder return performance relative to the S&P 500, as well as standard vesting schedules, indicating a strong incentive alignment with company performance.