Apple shareholders, “don’t sell yet,” Jack Hough reports for Barron’s. “Wait at least until the end of summer — apple-harvesting season in our home state of New York — when buzz for the coming 10-year anniversary iPhone is likely to hit a peak. Apple shares could return another 10% by then.”
“Services have brought in $25.5 billion in the past year, or more than 12% of revenue,” Hough reports. “Apple now makes more from services than from Mac computers. In the latest fiscal year, services revenue surged 22%, in part because Apple’s iPhone upgrade program cleverly packages an AppleCare service plan into the monthly installment payments.”
“AppleCare and related services now bring in 1.9% of total revenue, estimates Amit Daryanani, who covers Apple for RBC Capital. Other big contributors are iTunes, including movie rentals, and Apple Music, a streaming service, which combined deliver 2.5% of revenue; iCloud, Apple Pay, iAd, and such, which bring in 2.7%; and the app store — ‘the world’s greatest toll booth,’ according to Daryanani — at 3.9% of revenue,” Hough reports. “Daryanani reckons that swelling annuity makes the stock worth 17 times forward earnings, closer to where software and services companies like Microsoft and Alphabet trade. Apple is trading below 15 times forward earnings. Cash and investments have grown to $46 a share. Last Tuesday, Daryanani bumped his price target to $155 from $140.”
Read more in the full article here.
MacDailyNews Take: Just 10%?
[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]