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Big Tech Earnings: Time to Take Another Bite of Apple?
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Earnings season has been in high gear for some time now, with a feared ‘earnings apocalypse’ failing to materialize.
Last week, as many are highly aware, big-tech stole the spotlight, posting results that had the market celebrating and helping keep sentiment lifted heading into this week’s FOMC meeting.
And then there’s Apple (AAPL - Free Report) , the last of the group slated to report and arguably the most important of the five. The company will reveal its quarterly results this Thursday, May 4th, after the market’s close.
All styles of investors will be tuning into the quarterly results, as Apple carries the biggest weight in the S&P 500, roughly 7%. Let’s take a closer look at how the mega-cap titan stacks up heading into its quarterly release.
Quarterly Estimates
Since February of this year, the quarterly EPS estimate for Apple’s upcoming release has been revised 0.7% higher to $1.44 per share, with the value reflecting a modest 5.3% year-over-year pullback in earnings.
Image Source: Zacks Investment Research
Regarding the top line, our consensus estimate of $93.3 billion implies a 4% pullback from the year-ago quarter, with analysts revising their quarterly expectations marginally lower since February.
Image Source: Zacks Investment Research
Of course, iPhone revenue will be a focus. Currently, the Zacks Consensus estimate for iPhone revenue sits at $49.6 billion, implying a slight pullback year-over-year. In addition, it’s worth noting that the company has delivered back-to-back negative surprises within this metric.
iPhone Revenue - Surprise %
Image Source: Zacks Investment Research
While iPhone revenue remains important, the company’s Services results will also be closely watched, which includes cloud services, the App store, Apple Music, Apple Pay, and several others. Overall, Apple’s services have gained significant traction and have become a big contributor to the top line.
For the quarter, the Zacks Consensus estimate for Services net sales sits at $20.9 billion, implying growth of 5.5% from the year-ago period. As we can see in the chart below, Apple snapped a negative streak of surprises within the metric in its latest release.
Image Source: Zacks Investment Research
Quarterly Performance
Apple posted results that came in under expectations in its latest release, snapping a long streak of positive surprises on the top and bottom lines. The company reported earnings of $1.88 per share, 2.5% below the Zacks Consensus EPS estimate.
Further, quarterly revenue totaled $117.1 billion, again falling short of expectations by roughly 3.3%. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
As we can see in the chart below, the market has had somewhat mixed reactions to Apple’s quarterly results post-earnings.
Image Source: Zacks Investment Research
Valuation
Apple shares could be seen as a bit expensive, with the 28.2X forward earnings multiple sitting above the 24.2X five-year median by a fair margin. Still, the value remains well below highs of 31.3X in 2022.
Image Source: Zacks Investment Research
Further, the company’s forward price-to-sales ratio presently works out to be 6.9X, again above the 5.8X five-year median and the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
Bottom Line
Investors of all styles will be tuning into Apple’s (AAPL - Free Report) quarterly print, as the stock is one of the most important regarding the direction of the general market.
We’ve already gotten results from the other big-tech guys, including Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , and Meta Platforms (META - Free Report) . All five stocks have staged big rebounds in 2023 so far following a forgettable 2022.
Heading into the quarterly release, Apple is a Zacks Rank #3 (Hold) with an Earnings ESP Score of -0.3%.
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Image: Bigstock
Big Tech Earnings: Time to Take Another Bite of Apple?
Earnings season has been in high gear for some time now, with a feared ‘earnings apocalypse’ failing to materialize.
Last week, as many are highly aware, big-tech stole the spotlight, posting results that had the market celebrating and helping keep sentiment lifted heading into this week’s FOMC meeting.
We now have four quarterly prints from the ‘Big 5 Tech Players’, a list that includes Meta Platforms (META - Free Report) , Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) .
And then there’s Apple (AAPL - Free Report) , the last of the group slated to report and arguably the most important of the five. The company will reveal its quarterly results this Thursday, May 4th, after the market’s close.
All styles of investors will be tuning into the quarterly results, as Apple carries the biggest weight in the S&P 500, roughly 7%. Let’s take a closer look at how the mega-cap titan stacks up heading into its quarterly release.
Quarterly Estimates
Since February of this year, the quarterly EPS estimate for Apple’s upcoming release has been revised 0.7% higher to $1.44 per share, with the value reflecting a modest 5.3% year-over-year pullback in earnings.
Image Source: Zacks Investment Research
Regarding the top line, our consensus estimate of $93.3 billion implies a 4% pullback from the year-ago quarter, with analysts revising their quarterly expectations marginally lower since February.
Image Source: Zacks Investment Research
Of course, iPhone revenue will be a focus. Currently, the Zacks Consensus estimate for iPhone revenue sits at $49.6 billion, implying a slight pullback year-over-year. In addition, it’s worth noting that the company has delivered back-to-back negative surprises within this metric.
iPhone Revenue - Surprise %
Image Source: Zacks Investment Research
While iPhone revenue remains important, the company’s Services results will also be closely watched, which includes cloud services, the App store, Apple Music, Apple Pay, and several others. Overall, Apple’s services have gained significant traction and have become a big contributor to the top line.
For the quarter, the Zacks Consensus estimate for Services net sales sits at $20.9 billion, implying growth of 5.5% from the year-ago period. As we can see in the chart below, Apple snapped a negative streak of surprises within the metric in its latest release.
Image Source: Zacks Investment Research
Quarterly Performance
Apple posted results that came in under expectations in its latest release, snapping a long streak of positive surprises on the top and bottom lines. The company reported earnings of $1.88 per share, 2.5% below the Zacks Consensus EPS estimate.
Further, quarterly revenue totaled $117.1 billion, again falling short of expectations by roughly 3.3%. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
As we can see in the chart below, the market has had somewhat mixed reactions to Apple’s quarterly results post-earnings.
Image Source: Zacks Investment Research
Valuation
Apple shares could be seen as a bit expensive, with the 28.2X forward earnings multiple sitting above the 24.2X five-year median by a fair margin. Still, the value remains well below highs of 31.3X in 2022.
Image Source: Zacks Investment Research
Further, the company’s forward price-to-sales ratio presently works out to be 6.9X, again above the 5.8X five-year median and the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
Bottom Line
Investors of all styles will be tuning into Apple’s (AAPL - Free Report) quarterly print, as the stock is one of the most important regarding the direction of the general market.
We’ve already gotten results from the other big-tech guys, including Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , and Meta Platforms (META - Free Report) . All five stocks have staged big rebounds in 2023 so far following a forgettable 2022.
Heading into the quarterly release, Apple is a Zacks Rank #3 (Hold) with an Earnings ESP Score of -0.3%.