Apple Stock Analysis Essay

growth of 50.2% and the net profit of 56.1% over the same period. The company also enjoys strong

What 's the best guess for the stock if it were valued like its peers?

Stable cash flows with estimated total revenues increasing from 559.9 million in 1978 to 937.8 million in 1984 (Note also its strong intellectual property as shown by its

Apple offers common stock and the purchasing price of the stock was $112.34. Apple promotes its products through commercials that show the up to date and high-speed products. The initial interest in Apple was Black Friday was approaching and customers would be wanting to get deals. We brought numerous stocks because apple is a popular brand brought around Christmas time. We did not end up selling any shares because Apple was constantly increasing in value and in worth.

The inventory ratio is 61.6 - FY2016 and 59.6 -FY2015, this is above the industry average of 43.5, this shows Apple inventory management process is operating efficiently and the company is turning inventory at a heathy rate. Apples Debt ratio is well below industry, for FY2016 is 25.2% and FY2015 is 19.2% vs industry average of 53.7%. This indicates Apple’s debt is at reasonable levels, the company is a low risk borrower and has adequate assets to fund its debt. ROA (return on assets) is trending upward and is higher than the industry average of 15.07. For FY2016 the ROA was 30.7% vs. 28.4%. for FY2015, this indicates Apples earnings are sufficient, interest cost is low due to below average

Second once Apple stabilized after year 2019, the prediction of growth is 3%, and Beta was projected to be .96. Again, by using the boundaries stated above: the (Ke), weight of equity/debt, and WACC were as follow 6.34%, 80%, 20%, and 5.63%. These numbers were somewhat similar to its high growth stage; therefore, signifying Apple is still a strong company once it stabilizes. Yet, another reason why Apple can provide such attractive returns. Conversely, finding the Terminal Value (Pt) of the company, which is the value of the company at a future year, projected the PV for stable growth, in this case it was 2020. The (Pt) was over $1 billion, yet again another reason why Apple creates a great investment opportunity. Moreover, by adding all of the PV, including the stable growth year, the intrinsic value of the firm is over $966 million and minus the current value of debt, Apple is still worth (value of equity) over $926 million. This equity divided the current number of shares outstanding; Apple’s intrinsic value of stock is $988.80 per share. By comparison the current stock price, which is $649.79 per share, the stock value is undervalued. Likewise, making (AAPL) a rewarding opportunity that must not be taken for granted.

The negative change in stock prices comes up as a result of decrease in organization’s earnings. Investors lose confidence in a product once its share prices begin to fall as a result of competitors (Michelle, 2015). However, in view of the Apple stock analysis, the income is expected to grow at any time and the future company’s stock might be higher. The closing price for Apple in the stock market was $123.38. The purchase price was $130.28 with its percentage change in stock price as -5.30%.

The company has a high PE ratio , which is the highest in the sector , net income and total revenue gradually increased during last 4 years , though there was the financial crises

Among the myriad of technology companies now available for investment on the stock market, Google’s new parent Alphabet and the ever-innovating Apple Inc. maintain their spots as two of the most popular. The two titanic companies have previously had a sizeable gap between the values of their stocks, with Apple Inc. leading Alphabet thanks largely to its massive deposits of cash. USA Today analyst John Shinal asserts that because of this more rapid growth, Alphabet is the ideal investment over Apple Inc. for investors who favor growth stocks while Apple Inc. is preferred for its dividend payouts. Shinal’s assertion is presented in a very formal manner with few detractors, giving his analysis a larger feeling of credibility even without prior knowledge of his credentials.

This paper will analyze the financial position of Apple Inc. We will use horizontal and vertical analysis, eight financial ratios including rationale for the ratios chosen; and Altman Z-score to measure Apple’s overall profitability, liquidity and likelihood of bankruptcy. We will perform trend analysis to evaluate company’s performance over time, and use these trends as red flags or benchmarks for performance measurement.

Excellent financials, low debt load, 2001 was the 16th consecutive year with record performance. Price/earnings ratio is positive.

As before, the trend should be upward, and the higher the value, the better (**Book). Apple’s ratio for the past three years has been: 25.73% for 2010, 29.32% for 2011, and 30.35% for 2012 (Apple financials). While these values are not very high, the trend has been increasing over the time period. Therefore, the ratio shows positive growth for the company.

The debt to equity ratio is 2, the beta is 0.2 according to the FT (2015) which means its shares are 80% less risky in comparison to the entire market and the dividend payout ratio (DPS/EPS) for the company is

Another reason is that the price change is very high which is really good because it is consistent. Also, the earnings per share was at a great 5.17 and that gives us confidence because it is a true representation on what the company has earned. Sales and Income has increased compared to past few years which shows that the stock has improved and is getting better and better and it is also expected to increase even more in the next 5 years.

Apple Inc. is a very well known tech company that was founded in 1977 by Steve Jobs and Steve Wozniak. It offers a variety of services, such as designing, and manufacturing. Moreover, products known or used by consumers today are the Mac, iPhone, iPad, iPod…etc, basically anything that starts with an “i” is owned by this company. Furthermore, Apple is listed on the New York city Nasdaq 100 stock exchange index, which is composed of the top 100 tech companies in the U.S. It’s IPO was in Dec 12th 1980, they sold 4.6 million shares at the value of $22 per share, which is worth $97 per share today. Apple’s current Market Capitalization is $542 Billion dollars, which is calculated by multiplying the share price by the number of shares outstanding which will give you an indication of what it’s worth in a particular day after the market close. Moreover, I believe that Apple’s best strategic decision was made back in 2003 when iTunes was launched for windows, before this decision their programs only worked on Apple products. The launch of iTunes was the start of iPods being used by window users. This innovation led to the iPhone, and starting from that point consumers began to trust their products, and completed the full package of Apple products by buying the Macintosh. In addition, by studying and using the various valuation methods and ratios, such as Profitability ratios, operating returns, Leverage ratios, Liquidity ratios, Efficiency ratios, and Valuation ratios; I was able to