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Earnings season continues its rapid pace this week, as we have another full slate of quarterly releases to sort through. We’ve already gotten results from the big banks and several mega-cap technology players, with many more releases coming in the following weeks.
This week, technology titan Apple (AAPL - Free Report) will draw the most attention, one of two remaining from the ‘Big 7’ group yet to report. As we’re all aware, these mega-cap players have led the market’s surge in 2023, delivering outsized gains to investors.
Still, AAPL shares have faced adverse price action since their 2023 high in mid-July, down 13% since. Can a strong quarterly release breathe life back into shares? Let’s take a closer look at quarterly expectations and a few key metrics worth paying attention to.
Image Source: Zacks Investment Research
Apple Q4
Analysts have primarily kept their expectations unchanged for the upcoming release, with the $1.39 Zacks Consensus EPS Estimate up a fractional 0.6% since August and reflecting a change of +7.8% from the year-ago period.
Top line expectations have been taken modestly lower during the same period, as the $88.8 billion quarterly revenue estimate is down 1.1% and reflects a pullback of -1.5% year-over-year.
Image Source: Zacks Investment Research
Of course, a primary focus of the release will concern iPhone results. For the quarter, the Zacks Consensus Estimate for iPhone revenue stands at $44.2 billion, representing a positive change of +3.8% from the same period last year.
It’s worth noting that the company has struggled to exceed consensus iPhone revenue expectations as of late, falling short in three of its last four releases. Still, demand for the iPhone 15 Pro Max has been strong, likely to provide a tailwind.
Image Source: Zacks Investment Research
In addition, the company’s Services portfolio has become a notable contributor to its top line, which includes revenues from cloud services, the App Store, Apple Music, Apple Pay, and others. In fact, it was revealed in its latest release that its Services portfolio has amassed more than 1 billion paid subscribers and is expected to see accelerated growth in Q4 relative to Q3.
Regarding expectations, the Zacks Consensus Estimate for Services revenue stands at $21.4 billion, suggesting a climb of 11% from the year-ago period. The company has positively surprised on this metric in three consecutive quarters.
Image Source: Zacks Investment Research
To top it off, the company’s Wearables results (Apple Watch, AirPods) will also be a vital metric to keep a close eye on. The segment has seen solid growth in recent years, mainly thanks to consumers' extensive adoption of the Apple Watch and AirPods.
The Zacks Consensus Estimate for Wearables revenue presently sits at $9.3 billion, suggesting a change of -3.1% from the same period last year.
Bottom Line
Apple’s (AAPL - Free Report) quarterly release headlines the reporting docket this week, undoubtedly a quarterly print that can bring market-moving effects.
Analysts have primarily kept their expectations unchanged, with earnings forecasted to see growth amid a pullback within revenue compared to the year-ago period. In addition, iPhone and Services results are expected to see accelerated growth relative to its Q3.
Apple shares currently trade at a 25.5X forward 12-month earnings multiple, beneath the 30.1X high this year and modestly above the 24.4X five-year median. The value undoubtedly resides on the higher end, but investors have had little issue forking up the premium given the company’s fortified stance in a somewhat uncertain outlook.
The stock has a Value Style Score of “D.”
Image Source: Zacks Investment Research
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Apple Q4 Preview: Should Investors Take a Bite?
Earnings season continues its rapid pace this week, as we have another full slate of quarterly releases to sort through. We’ve already gotten results from the big banks and several mega-cap technology players, with many more releases coming in the following weeks.
This week, technology titan Apple (AAPL - Free Report) will draw the most attention, one of two remaining from the ‘Big 7’ group yet to report. As we’re all aware, these mega-cap players have led the market’s surge in 2023, delivering outsized gains to investors.
Still, AAPL shares have faced adverse price action since their 2023 high in mid-July, down 13% since. Can a strong quarterly release breathe life back into shares? Let’s take a closer look at quarterly expectations and a few key metrics worth paying attention to.
Image Source: Zacks Investment Research
Apple Q4
Analysts have primarily kept their expectations unchanged for the upcoming release, with the $1.39 Zacks Consensus EPS Estimate up a fractional 0.6% since August and reflecting a change of +7.8% from the year-ago period.
Top line expectations have been taken modestly lower during the same period, as the $88.8 billion quarterly revenue estimate is down 1.1% and reflects a pullback of -1.5% year-over-year.
Image Source: Zacks Investment Research
Of course, a primary focus of the release will concern iPhone results. For the quarter, the Zacks Consensus Estimate for iPhone revenue stands at $44.2 billion, representing a positive change of +3.8% from the same period last year.
It’s worth noting that the company has struggled to exceed consensus iPhone revenue expectations as of late, falling short in three of its last four releases. Still, demand for the iPhone 15 Pro Max has been strong, likely to provide a tailwind.
Image Source: Zacks Investment Research
In addition, the company’s Services portfolio has become a notable contributor to its top line, which includes revenues from cloud services, the App Store, Apple Music, Apple Pay, and others. In fact, it was revealed in its latest release that its Services portfolio has amassed more than 1 billion paid subscribers and is expected to see accelerated growth in Q4 relative to Q3.
Regarding expectations, the Zacks Consensus Estimate for Services revenue stands at $21.4 billion, suggesting a climb of 11% from the year-ago period. The company has positively surprised on this metric in three consecutive quarters.
Image Source: Zacks Investment Research
To top it off, the company’s Wearables results (Apple Watch, AirPods) will also be a vital metric to keep a close eye on. The segment has seen solid growth in recent years, mainly thanks to consumers' extensive adoption of the Apple Watch and AirPods.
The Zacks Consensus Estimate for Wearables revenue presently sits at $9.3 billion, suggesting a change of -3.1% from the same period last year.
Bottom Line
Apple’s (AAPL - Free Report) quarterly release headlines the reporting docket this week, undoubtedly a quarterly print that can bring market-moving effects.
Analysts have primarily kept their expectations unchanged, with earnings forecasted to see growth amid a pullback within revenue compared to the year-ago period. In addition, iPhone and Services results are expected to see accelerated growth relative to its Q3.
Apple shares currently trade at a 25.5X forward 12-month earnings multiple, beneath the 30.1X high this year and modestly above the 24.4X five-year median. The value undoubtedly resides on the higher end, but investors have had little issue forking up the premium given the company’s fortified stance in a somewhat uncertain outlook.
The stock has a Value Style Score of “D.”
Image Source: Zacks Investment Research