“On Tuesday July 22, tech giant Apple released its earnings to an anxious market,” Jamal Carnette writes for The Motley Fool. “Overall, the company beat analyst expectations on the top and bottom lines, posting $49.6 billion in revenue and EPS of $1.85 versus consensus figures of $49.4 billion and $1.81. On a year-over-year basis, those numbers are up 33% and 45%, respectively, as Apple appeared to overperform.”
“So naturally you’d expect a strong surge as investors reacted to a rather successful quarter… and you’d be wrong,” Carnette writes. “What happened instead was a 7% after-hours drop and myriad headlines declaring Apple’s ‘disappointing earnings.’ And while Apple beat Wall Street analyst figures, the company fell short of the “whisper number” that speculated Apple would sell 50 million iPhones.”
“The reaction to Apple’s earnings confirms that investors expectations are highly irrational,” Carnette writes. “Personally, I’d say selling Apple off to the tune of 7% for a slight miss on its aging phone iteration — even while beating analyst expectations in revenue and EPS — falls in the category of irrational actions. If you’re a long-term investor, you should be encouraged with Apple’s results… I believe in buying great companies and letting them operate. Long story short, I think Apple is undervalued and I’m willing to wait through Wall Street’s irrationality to find out.”
Read more in the full article here.
MacDailyNews Take: Unless they shorted it, of course.