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Apple (AAPL) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Apple (AAPL - Free Report) closed at $121.05, marking a -0.75% move from the previous day. This change lagged the S&P 500's daily gain of 0.1%. At the same time, the Dow added 0.9%, and the tech-heavy Nasdaq lost 0.59%.

Prior to today's trading, shares of the maker of iPhones, iPads and other products had lost 9.75% over the past month. This has lagged the Computer and Technology sector's loss of 5.38% and the S&P 500's gain of 0.71% in that time.

Wall Street will be looking for positivity from AAPL as it approaches its next earnings report date. In that report, analysts expect AAPL to post earnings of $0.99 per share. This would mark year-over-year growth of 54.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $77.39 billion, up 32.71% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.48 per share and revenue of $336.56 billion, which would represent changes of +36.59% and +22.6%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AAPL. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. AAPL currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that AAPL has a Forward P/E ratio of 27.22 right now. For comparison, its industry has an average Forward P/E of 20.05, which means AAPL is trading at a premium to the group.

Investors should also note that AAPL has a PEG ratio of 2.37 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Mini computers industry currently had an average PEG ratio of 1.77 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 22, putting it in the top 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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