“I find Apple today to be markedly less risky than many of its tech peers, particularly as its multiples are not fully reflecting the true potential of its Service business,” Michael Wiggins De Oliveira writes for Seeking Alpha.
“Apple finished fiscal 2017 in strong footing, proving to all its critics that it is still a growth company. So many investors had, for far too long, been chanting that Apple was a mature company, without enough markets which it could successfully penetrate – which could meaningfully move the needle on its bottom line,” De Oliveira writes. “Now, as time moves forward, Cook and team are able to demonstrate what they do best – grow Apple’s opportunity.”
“Apple is one of the most cash generative businesses around, which is backed by a balance sheet which carries $150 billion net cash position. Said in other words, currently, approximately 15% of its market cap is composed of cash,” De Oliveira writes. “Apple stated in Q1 2017 that one of its top priorities would be to grow the size of its Service revenue, so that by 2020, it would double in size from fiscal 2016 – in just four short years. And true to form, Apple continues to make strong progress, with Q4 2017 ending up with adjusted run rate of 24% growth YoY. I have felt for some time and continue to believe so now that Apple’s Services opportunity is underappreciated by investors.”
Read more in the full article here.
MacDailyNews Take: Yup.
Apple’s services business is an unstoppable locomotive that, someday, even Mr. Market might fairly value. — MacDailyNews, August 9, 2017
Apple Services: The nitrous in Cupertino’s profit engine – November 27, 2017
Inside Apple’s massive services results – August 9, 2017
Misunderstanding Apple Services – August 7, 2017
Dispelling the Apple Services myth – May 3, 2017
Apple’s Services business: $7 billion in revenue last quarter alone – May 3, 2017
Apple’s Services (App Store, Apple Music, Apple Pay) business is an unstoppable juggernaut that’s still just gathering strength – May 3, 2017