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Apple (AAPL) Gains But Lags Market: What You Should Know

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In the latest trading session, Apple (AAPL - Free Report) closed at $364.80, marking a +0.83% move from the previous day. This move lagged the S&P 500's daily gain of 1.54%. At the same time, the Dow added 0.85%, and the tech-heavy Nasdaq gained 1.87%.

Prior to today's trading, shares of the maker of iPhones, iPads and other products had gained 12.41% over the past month. This has outpaced the Computer and Technology sector's gain of 3.97% and the S&P 500's gain of 0.57% in that time.

AAPL will be looking to display strength as it nears its next earnings release. On that day, AAPL is projected to report earnings of $2.09 per share, which would represent a year-over-year decline of 4.13%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $50.98 billion, down 5.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.32 per share and revenue of $262.10 billion. These totals would mark changes of +3.62% and +0.74%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AAPL. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 0.25% higher. AAPL is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that AAPL has a Forward P/E ratio of 29.38 right now. This valuation marks a premium compared to its industry's average Forward P/E of 8.16.

It is also worth noting that AAPL currently has a PEG ratio of 2.67. 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 was holding an average PEG ratio of 2.67 at yesterday's closing price.

The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow AAPL in the coming trading sessions, be sure to utilize Zacks.com.


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