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Apple (AAPL - Free Report) , a behemoth in the market, is on deck to unveil quarterly earnings on October 27th, after the market close.
Revenue from the company’s services will be a closely watched metric, as the company has witnessed strong growth in the area.
Let’s take a deeper dive into what to expect.
Service Revenues
Of course, Apple’s business is primarily run around its flagship iPhone. However, the company’s services have also been a nice contributor to the top-line.
Some of Apple’s services include Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+, Apple Podcasts, and Apple Fitness+.
In its latest quarter, the segment raked in $19.6 billion, falling short of the Zacks Consensus Estimate by a marginal 0.7% but reflecting a 12% Y/Y uptick.
In addition, Apple reported having more than 860 million paid subscribers across its services at the end of the quarter, up 35 million sequentially and 160 million Y/Y, owing to the strong performance of Apple TV+ and Apple Arcade.
Now, for the upcoming quarter, the Zacks Consensus Estimate for the segment sits at $19.7 billion, indicating a marginal sequential uptick and a 7.6% Y/Y increase.
Share Performance & Valuation
Year-to-date, Apple shares have held up relatively well, down 14% vs. the general market’s decline of roughly 20%.
Image Source: Zacks Investment Research
The relative strength shows that market participants have respected Apple shares much higher than most, undoubtedly a positive in a historically-volatile 2022.
AAPL’s valuation multiples have pulled back by a fair margin; the company’s 22.9X forward earnings multiple is just a tick below its five-year median and nowhere near 2021 highs of 35.6X.
The company carries a Value Style Score of a C.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have primarily been bullish regarding their earnings outlook, with three positive earnings estimate revisions hitting the tape over the last several months. The Zacks Consensus EPS Estimate of $1.26 suggests Y/Y earnings growth of a modest 1.6%.
Image Source: Zacks Investment Research
Apple’s top-line looks to improve as well; the Zacks Consensus Sales Estimate of $88.5 billion suggests revenue growth of 6% from year-ago quarterly sales of $83.4 billion.
Bottom Line
Revenue from the company’s services will be a closely monitored metric in the earnings call, as Apple has witnessed strong growth across the area.
Further, the growth within its services portfolio can help offset the company’s dependence on its flagship product, the iPhone.
Currently, the Zacks Consensus Estimate suggests Y/Y revenue growth in the area and a marginal sequential uptick.
In its latest quarter, the company’s subscriber base for its services grew notably, and it looks to continue that trend.
The tech titan has an impressive earnings track record, exceeding revenue and earnings estimates in nine of its last ten quarters. Just in its latest print, Apple (AAPL - Free Report) registered a 5.3% EPS beat and a 1.2% revenue beat.
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Don't Overlook Service Revenues in Apple's Q4
Apple (AAPL - Free Report) , a behemoth in the market, is on deck to unveil quarterly earnings on October 27th, after the market close.
Revenue from the company’s services will be a closely watched metric, as the company has witnessed strong growth in the area.
Let’s take a deeper dive into what to expect.
Service Revenues
Of course, Apple’s business is primarily run around its flagship iPhone. However, the company’s services have also been a nice contributor to the top-line.
Some of Apple’s services include Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+, Apple Podcasts, and Apple Fitness+.
In its latest quarter, the segment raked in $19.6 billion, falling short of the Zacks Consensus Estimate by a marginal 0.7% but reflecting a 12% Y/Y uptick.
In addition, Apple reported having more than 860 million paid subscribers across its services at the end of the quarter, up 35 million sequentially and 160 million Y/Y, owing to the strong performance of Apple TV+ and Apple Arcade.
Now, for the upcoming quarter, the Zacks Consensus Estimate for the segment sits at $19.7 billion, indicating a marginal sequential uptick and a 7.6% Y/Y increase.
Share Performance & Valuation
Year-to-date, Apple shares have held up relatively well, down 14% vs. the general market’s decline of roughly 20%.
Image Source: Zacks Investment Research
The relative strength shows that market participants have respected Apple shares much higher than most, undoubtedly a positive in a historically-volatile 2022.
AAPL’s valuation multiples have pulled back by a fair margin; the company’s 22.9X forward earnings multiple is just a tick below its five-year median and nowhere near 2021 highs of 35.6X.
The company carries a Value Style Score of a C.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have primarily been bullish regarding their earnings outlook, with three positive earnings estimate revisions hitting the tape over the last several months. The Zacks Consensus EPS Estimate of $1.26 suggests Y/Y earnings growth of a modest 1.6%.
Image Source: Zacks Investment Research
Apple’s top-line looks to improve as well; the Zacks Consensus Sales Estimate of $88.5 billion suggests revenue growth of 6% from year-ago quarterly sales of $83.4 billion.
Bottom Line
Revenue from the company’s services will be a closely monitored metric in the earnings call, as Apple has witnessed strong growth across the area.
Further, the growth within its services portfolio can help offset the company’s dependence on its flagship product, the iPhone.
Currently, the Zacks Consensus Estimate suggests Y/Y revenue growth in the area and a marginal sequential uptick.
In its latest quarter, the company’s subscriber base for its services grew notably, and it looks to continue that trend.
The tech titan has an impressive earnings track record, exceeding revenue and earnings estimates in nine of its last ten quarters. Just in its latest print, Apple (AAPL - Free Report) registered a 5.3% EPS beat and a 1.2% revenue beat.