AAPL - Embedded Expectations Analysis - 2021 08 19
Apple Inc. (AAPL:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 24.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management appears concerned about sales growth, services performance, and 5G adoption.Specifically, management may lack confidence in their ability to sustain iPhone and iPad sales growth, compete in the semiconductor market, and generate cost savings. In addition, they may have concerns about the pace of 5G deployment in emerging markets, the performance of their services business, and the security of their new health data sharing feature. Furthermore, management may lack confidence in their ability to continue creating technologies that improve people's lives and increase the number of customers engaging with their ecosystem. Finally, they may be exaggerating the potential of FaceTime's new share play and spatial audio features and their capabilities in the accessibility space.
Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The company's products include: iPhone; Mac; iPad; and wearables, home and accessories, which includes AirPods?, Apple TV?, Apple Watch?, Beats? products, HomePod?, iPod touch? and other Apple-branded and third-party accessories. The company's services include: digital content stores and streaming services; AppleCare, which includes AppleCare + (AC+) and the AppleCare Protection Plan; iCloud, which is the company's cloud service; licensing; and other services, which include Apple Arcade?, Apple Card?, Apple News+, and Apple Pay, a cashless payment service.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.