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Apple (AAPL) Soars to a 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Apple (AAPL - Free Report) ? Shares have been on the move with the stock up 9.3% over the past month. AAPL hit a new 52-week high of $209.78 in the previous session. Apple has gained 23.4% since the start of the year compared to the 11.1% move for the Computer and Technology sector and the 24% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on July 31, 2018, Apple reported EPS of $2.34 versus consensus estimate of $2.17 while it beat the consensus revenue estimate by 1.71%.
For the current fiscal year, Apple is expected to post earnings of $11.68 per share on $263.68 billion in revenues. This represents a 26.82% change in EPS on a 15.03% change in revenues. For the next fiscal year, the company is expected to earn $13.04 per share on $272.49 billion in revenues. This represents a year-over-year change of 11.63% and 3.34%, respectively.
Valuation Metrics
Apple may be at a 52-week high right now, but what might the future hold for AAPL? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Apple has a Value Score of C. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 18.4X versus its peer group's average of 12.7X. Additionally, the stock has a PEG ratio of 1.65. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Apple currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Apple meets the list of requirements. Thus, it seems as though AAPL shares could have potential in the weeks and months to come.
How Does Apple Stack Up to the Competition?
Shares of Apple have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including TransAct Technologies (TACT - Free Report) , Electronics for Imaging , and Seagate Technology (STX - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AAPL, even beyond its own solid fundamental situation.
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Apple (AAPL) Soars to a 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Apple (AAPL - Free Report) ? Shares have been on the move with the stock up 9.3% over the past month. AAPL hit a new 52-week high of $209.78 in the previous session. Apple has gained 23.4% since the start of the year compared to the 11.1% move for the Computer and Technology sector and the 24% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on July 31, 2018, Apple reported EPS of $2.34 versus consensus estimate of $2.17 while it beat the consensus revenue estimate by 1.71%.
For the current fiscal year, Apple is expected to post earnings of $11.68 per share on $263.68 billion in revenues. This represents a 26.82% change in EPS on a 15.03% change in revenues. For the next fiscal year, the company is expected to earn $13.04 per share on $272.49 billion in revenues. This represents a year-over-year change of 11.63% and 3.34%, respectively.
Valuation Metrics
Apple may be at a 52-week high right now, but what might the future hold for AAPL? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Apple has a Value Score of C. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 18.4X versus its peer group's average of 12.7X. Additionally, the stock has a PEG ratio of 1.65. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Apple currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Apple meets the list of requirements. Thus, it seems as though AAPL shares could have potential in the weeks and months to come.
How Does Apple Stack Up to the Competition?
Shares of Apple have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including TransAct Technologies (TACT - Free Report) , Electronics for Imaging , and Seagate Technology (STX - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AAPL, even beyond its own solid fundamental situation.