• Reinhardt Coetzee


Updated: Jan 31

Apple (AAPL) is a global telecommunication and technology powerhouse. In 2020, it’s been one of the companies that had a great run. Its stock rose to an all-time high of nearly $138 in September, fueled by strong Q3 earnings and a 4-for-1 stock split that came into effect on August 24.

Even though the stock price has pulled back a bit from the peak in October, it is still riding very high.

◾Apple’s Q3 Earnings Report Proved Analysts Wrong

On July 30th, 2020, Apple reported its Q3 earnings for the quarter ended June 27 and proved many analysts wrong. The big-tech giant reported revenue of $59.69 billion, beating analysts’ consensus expectations of $52.25 billion by more than $7 billion. The quarterly total revenue was Apple’s Q3 revenue was up nearly 11% year over year, boosted by year-over-year growth of every major product line offered by the company. Revenue from iPhone was $26.42 billion compared to $22.37 billion expected by analysts. It also reported earnings-per-share of $2.58 against analysts' expectations of $2.04.

Apple surpassed its goal for services sales of $50 billion after attaining a 14.85% increase from Q3 2019. As its second-largest segment, Apple’s services continue to catalyze growth. Earnings per share for its fiscal third-quarter revenue jumped 18%. Its earnings for fiscal Q3 were impressive across the board, which indicates the rejuvenation of the giant, given that its business is highly seasonal. Apple’s revenue for the quarter is the highest Q3 revenue in its history. The company’s earnings report for the fiscal quarter ending Sep 2020 is expected later today after markets close. Analysts’ consensus EPS forecast is $0.69 for the quarter.

◾Why is Apple still a great investment?

Traditionally, Apple was considered a ‘safer’ bet for cautious investors. Now, it is attracting all profit-minded investors. Why? It all comes down to what the company has in store for the future. The company recently refreshed some of its products and has lined up several new products and services to be released in the coming months. Its new smart speaker is expected to be launched in a few weeks. It will also be launching Apple Fitness+ and Apple One, a bundled offering of its native services. These two services will bolster the lucrative segment further and catalyze growth. Apple is also expected to benefit from the incoming 5G network and perfectly positioned to exploit 5G for long-term growth. The company is also expected to be one of the big frontrunners in the coming AR technology wave and has been rumored to be working on its AR wearable tech for some time now.

With liquidity of about $193.6 billion, Apple has immense financial capability in its reserves that guarantee the stability of its stock prices for many years to come. Analysts and observers agree that Apple's market cap will continue to grow and can reach $3 trillion by 2023.

◾Bottom Line

Apple has proven, once again, why it is the most iconic brand in the world. Its impressive Q3 earnings report, coupled with its stability and projected growth in the coming years, should still give it a solid position in a balanced long-term portfolio.

𝘋𝘪𝘴𝘤𝘭𝘰𝘴𝘶𝘳𝘦: 𝘐 𝘰𝘸𝘯 Apple 𝘪𝘯 𝘮𝘺 𝘱𝘰𝘳𝘵𝘧𝘰𝘭𝘪𝘰 𝘢𝘯𝘥 𝘵𝘩𝘪𝘴 𝘪𝘴 𝘮𝘺 𝘱𝘦𝘳𝘴𝘰𝘯𝘢𝘭 𝘷𝘪𝘦𝘸 𝘢𝘯𝘥 𝘢𝘯𝘢𝘭𝘺𝘴𝘪𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘤𝘰𝘮𝘱𝘢𝘯𝘺 𝘢𝘯𝘥 𝘴𝘩𝘰𝘶𝘭𝘥 𝘯𝘰𝘵 𝘣𝘦 𝘵𝘢𝘬𝘦𝘯 𝘢𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘢𝘥𝘷𝘪𝘤𝘦.


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Stock returns for portfolio and individual  trade returns correct as of 2022/02/03

© 2022 by reinhardtcoetzee.com

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