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It’s a highly critical week for earnings, with several mega-cap technology companies slated to reveal quarterly results. The strength of these mega-cap names has been admired by all, with many expecting positive results to keep overall market momentum flowing.
Perhaps the most popular of the bunch, market leader Apple (AAPL - Free Report) will reveal quarterly results on February 1st after the market’s close. The company has been on a solid earnings streak as of late, exceeding our consensus earnings and revenue expectations in three consecutive quarters.
Shares got a nice boost following its latest set of results, sparking a strong rally.
Image Source: Zacks Investment Research
How do expectations stack up heading into the release? Let’s take a quick look at headline estimates and a few key other metrics to keep an eye on within the release.
Headline Figures
Analysts have been bullish regarding the bottom line, with the $2.09 Zacks Consensus EPS Estimate up a modest 1.5% since November and suggesting growth of roughly 11% year-over-year.
Image Source: Zacks Investment Research
Revenue expectations have been revised modestly lower, as the $117 billion quarterly sales estimate has been taken 1.4% lower over the same period.
Image Source: Zacks Investment Research
Key Metrics
Apple’s services portfolio has also been a great source of growth over the last several years. It includes Apple Music, Apple TV+, Apple Arcade, Apple Pay, and more.
For the quarter, we expect the company to post $23.3 billion in revenue from Services, nicely above the year-ago mark of $20.7 billion, reflecting 12.5% growth. Apple has consistently positively surprised on this metric as of late, as we can see below.
Image Source: Zacks Investment Research
As expected, iPhone revenue will also be a big focus, particularly as the company continues to face competition in other markets. For the quarter, we expect Apple to post $68.6 billion in iPhone revenue, suggesting an increase of roughly 4% year-over-year.
iPhone results have been primarily mixed as of late, with the company falling short of consensus expectations in back-to-back releases.
Image Source: Zacks Investment Research
Valuation
Shares are trading at a premium relative to historical levels, with the current 28.4X forward 12-month earnings multiple sitting above the 25.2X five-year median. The forward 12-month price-to-sales ratio sits at 7.4X, near five-year highs and above the 6.0X five-year median.
Still, investors have had little issue forking up the premium given the company’s dominant stance, as reflected by the share performance.
Image Source: Zacks Investment Research
Bottom Line
We’ve got a loaded slate of earnings this week, with beloved Apple (AAPL - Free Report) a part of the reporting docket. Earnings estimates have been taken higher whereas revenue expectations have fallen modestly, with both items expected to be higher than the year-ago period.
Investors will closely watch the company’s Services results as well as iPhone sales, two key growth drivers for Apple. Heading into the release, the stock is presently a Zacks Rank #3 (Hold).
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Apple Q1 Earnings: Key Metrics to Watch
It’s a highly critical week for earnings, with several mega-cap technology companies slated to reveal quarterly results. The strength of these mega-cap names has been admired by all, with many expecting positive results to keep overall market momentum flowing.
Perhaps the most popular of the bunch, market leader Apple (AAPL - Free Report) will reveal quarterly results on February 1st after the market’s close. The company has been on a solid earnings streak as of late, exceeding our consensus earnings and revenue expectations in three consecutive quarters.
Shares got a nice boost following its latest set of results, sparking a strong rally.
Image Source: Zacks Investment Research
How do expectations stack up heading into the release? Let’s take a quick look at headline estimates and a few key other metrics to keep an eye on within the release.
Headline Figures
Analysts have been bullish regarding the bottom line, with the $2.09 Zacks Consensus EPS Estimate up a modest 1.5% since November and suggesting growth of roughly 11% year-over-year.
Image Source: Zacks Investment Research
Revenue expectations have been revised modestly lower, as the $117 billion quarterly sales estimate has been taken 1.4% lower over the same period.
Image Source: Zacks Investment Research
Key Metrics
Apple’s services portfolio has also been a great source of growth over the last several years. It includes Apple Music, Apple TV+, Apple Arcade, Apple Pay, and more.
For the quarter, we expect the company to post $23.3 billion in revenue from Services, nicely above the year-ago mark of $20.7 billion, reflecting 12.5% growth. Apple has consistently positively surprised on this metric as of late, as we can see below.
Image Source: Zacks Investment Research
As expected, iPhone revenue will also be a big focus, particularly as the company continues to face competition in other markets. For the quarter, we expect Apple to post $68.6 billion in iPhone revenue, suggesting an increase of roughly 4% year-over-year.
iPhone results have been primarily mixed as of late, with the company falling short of consensus expectations in back-to-back releases.
Image Source: Zacks Investment Research
Valuation
Shares are trading at a premium relative to historical levels, with the current 28.4X forward 12-month earnings multiple sitting above the 25.2X five-year median. The forward 12-month price-to-sales ratio sits at 7.4X, near five-year highs and above the 6.0X five-year median.
Still, investors have had little issue forking up the premium given the company’s dominant stance, as reflected by the share performance.
Image Source: Zacks Investment Research
Bottom Line
We’ve got a loaded slate of earnings this week, with beloved Apple (AAPL - Free Report) a part of the reporting docket. Earnings estimates have been taken higher whereas revenue expectations have fallen modestly, with both items expected to be higher than the year-ago period.
Investors will closely watch the company’s Services results as well as iPhone sales, two key growth drivers for Apple. Heading into the release, the stock is presently a Zacks Rank #3 (Hold).