Apple (AAPL) closed at $337.30 in the latest trading session, marking a +1.47% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 1.14%. Elsewhere, the Dow saw an upswing of 0.61%, while the tech-heavy Nasdaq appreciated by 1.69%.
Heading into today, shares of the maker of iPhones, iPads and other products had gained 4.92% over the past month, outpacing the Computer and Technology sector’s loss of 1.69% and the S&P 500’s loss of 2.85%.
Analysts and investors alike will be keeping a close eye on the performance of Apple in its upcoming earnings disclosure. On that day, Apple is projected to report earnings of $1.99 per share, which would represent year-over-year growth of 7.57%. In the meantime, our current consensus estimate forecasts the revenue to be $112.84 billion, indicating a 10.12% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $8.85 per share and revenue of $477.91 billion. These totals would mark changes of +18.63% and +14.84%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Apple. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% lower. Right now, Apple possesses a Zacks Rank of #3 (Hold).
Investors should also note Apple’s current valuation metrics, including its Forward P/E ratio of 37.43. This expresses a premium compared to the average Forward P/E of 21.45 of its industry.
It is also worth noting that AAPL currently has a PEG ratio of 2.84. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. As of the close of trade yesterday, the Computer – Micro Computers industry held an average PEG ratio of 1.76.
