We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
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).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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).