“When Apple released its fiscal Q1 earnings it gave, as usual, its guidance for the coming quarter, including: ‘Revenue between $60 billion and $62 billion,'” J. M. Manness writes for Seeking Alpha. “Even the higher figure is well below the $65.73 billion that was analyst consensus. This fact, along with the overall market downturn, was the fuel for Apple’s strong correction.”
“‘Revenue between $60 billion and $62 billion’ would represent growth over the year-ago quarter. So at a very minimum, we are looking forward to probable growth,” Manness writes. “I believe that (barring any economic catastrophe) Apple will make the high-end number.”
“The most important thing is that in spite of the fact that analysts are disappointed with Apple’s guidance, at the upper figure there’s over 17% revenue growth,” Manness writes. “The market often focuses on the negatives in Apple reports. If we look at things realistically, then we see that the numbers are a lot more positive than at first glance.”
Much more in the full article here.
MacDailyNews Take: As always, the question remains: Apple can beat their guidance, but can they beat the analysts’ consensus expectations?
[Thanks to MacDailyNews Reader “sharkaf” for the heads up.]
When did analysts “expectations” become more important than the actual company’s own guidance? This is completely asinine.
I’ll never understand why analyst’s expectations are more important than company guidance. I remember at one time Wall Street said that Apple was sandbagging its own guidance in order to beat expectations, so maybe the analysts and investors didn’t like that possibility, so they set their own expectations. I’m not sure why a healthy company needs to sandbag guidance, but then I really don’t understand much about company value.
I think analysts sandbag some companies’ expectations so they can beat them and drive up the share price, but that’s just my biased opinion. I think a lot of analysts actually want Apple to miss expectations to keep the share price down.
I can only use the P/E to base my opinions. Why Apple’s P/E is half of what other major tech companies have simply smells fishy to me. However, that vague growth potential factor is something I can’t actually grasp. I’m unable to project value years into the future. If Amazon can actually meet 325X forward revenue I’ll be simply astounded. I can’t even see Tesla becoming profitable but yet investors keep pouring money into that company.
Although I grasp the smartphone market is saturated, I would think Apple has the means (cash) to do whatever is necessary to boost revenue which might involve Apple getting into a whole new business. Wall Street simply doesn’t see it that way and so they pin zero-growth potential on Apple. The future is never set in stone but they believe Apple’s future is set in stone and not in a good way.
So just like today when all the major tech stock’s gains are flying high, Apple gains are the lowest. Apple has to be the black sheep. It might be good for share buybacks but I won’t know that until the outstanding number of shares shrinks again. I suppose if Apple is good enough for Warren Buffett to totally load up on, then I suppose it’s good enough for me.
Your question is reasonable. I can’t find a definitive answer, but it has been several decades since analysts’ expectations exceeded actual company performance as the primary driver of stock prices.
What other company on the face of the planet has $200,000,000 Biiiiiiiiiiiilion dollars in cash (pocket change) available to them besides Apple? Well? Name 1ONE.
Remember how WallShite touted the massive cash on hand with MicroDope? These BOZO manipulators NEED to be held to account. SO CORRUPT.
I don’t think it matters how much cash or profits Apple has. Based on how much share gains Amazon makes each day, I fully believe Amazon will blow past Apple in overall value by the end of the year. Apple will likely lose out to Amazon in market cap and that will be the end of that. Amazon has already stepped over Microsoft without breaking a sweat. Next comes Alphabet and then Apple. Amazon is too big to fail and Jeff Bezos is a god on Wall Street. As far as Wall Street is concerned, Apple has already lost to Amazon. Amazon shareholders are already dancing in the street on a daily basis.
Sooner or later, analysts and investors will realize that Amazon’s profit potential is less than they had imagined. Then the stock price will correct in a major way. Furthermore, there is a company called Alibaba that has the potential to best Amazon on a worldwide basis. That doesn’t mean that Amazon will not continue to grow, but it does place a tighter cap on the limit of that growth. And that will eventually temper investor enthusiasm. Meanwhile, investor enthusiasm in AAPL has largely run its course based on the fairly low and steady P/E.