Apple reported March quarter results with revenue 16% above the Street. While growth rates will fluctuate, Apple will remain a growth story for the foreseeable future, longtime analyst Gene Munster writes for Loup Ventures.
The company will benefit from a multiyear 5G cycle, an accelerating digital transformation driving demand for its products and services, and eventual new product categories. Putting it together, we believe shares of AAPL will approach $200 (48% upside from current levels) over the next several years, based on 35x our 2022 EPS estimate of $5.70. As analysts update their estimates, we believe consensus expectations for 2022 EPS will be closer to $5.00.
We’re hard pressed to remember a quarter with this kind of beat. It’s reminiscent of the upside in some quarters a decade ago, when iPhone was ramping into new carriers. Investor enthusiasm related to the March quarter is diluted by concerns about sustainability of these spectacular results.
For those who have closely followed the Apple story, the “it can’t get better than this” line of thinking is a well-traveled investment outlook. Despite these perennial concerns, Apple has launched new products and services to keep the impressive results coming. We believe this pattern will continue in the decade ahead, as the company adds hardware as a service offerings, launches mixed reality products, and finds a path into the massive addressable market of the upcoming transportation paradigm shift to autonomy.
We believe that Apple’s best days are still ahead based on an accelerating digital transformation that we cannot yet fully comprehend.
MacDailyNews Take: There’s much more in the recommended full article here. We agree wholeheartedly with Loup Ventures’ overarching theme. With Apple, you’ve only seen the tip of the iceberg!