The price to earnings ratio of Apple increased from around (in January) ********************************************* (to) ************************************************************** by January (****************************************, by more than two-fold in 25 months.
Apple earnings flat while stock soars: what’s behind it?
Since last year, the PE ratio of Apple soared significantly and it shows that the stock is rising mostly based on sentiment.
******************************** (Profits to earnings ratio of Apple stock doubles in
********************************** mo nths | Source: YCHARTS
Investors are becoming increasingly confident in the long-term trend of Apple and the company’s strategy to deal with the plateauing smartphone market.
The iPhone was a home run in regard to popularity and demand in key markets such as the US and China. Despite Apple boosting production to meet with unexpectedly large demand, early estimates put
iPhone sales in to be at around 180 million.
That is a substantially lower number compared to previous years in and 2020. From January to December 2018,
Apple shipped**************************************** million devices.
Hence, almost a two-fold increase in the stock price of Apple in with flat earnings and mediocre iPhone sales considering figures from the past two years indicates the stock is overvalued.
But, it also shows that investors highly rate Apple’s diversification of its products and operations. In particular, the company entrance into the audio market has investors excited for
As said by Pogo Financial CEO Adam Ludwin, audio was the single most important consumer trend in He said:
Apple has positioned well to target the rapidly expanding audio market. The production of AirPods expanded by nearly (************************************************************% in late (************************************************. ********** Lambda School growth head Jeff Morris said that last year was “insane” for AirPods, giving the Apple stock a much needed boost prior to the new year.
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Source: (Twitter
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How much further can it go?
Some analysts, like Wedbush’s Dan Ives, see the market cap of Apple hitting $ 2 trillion in the next months.
In the short-term, Ives said last month that theApple stock could rise to as high as $. That would mean almost a (********************************************************************% move until the year end.
The company willingness and ability to expand beyond its core products and operationscontinue to lead investors to become optimisticin the medium to long-term trend of the stock.
A $ 2 trillion market cap would still require sustained momentum in the US stock market in the upcoming months, and that remains outside of Apple’s control.
Assuming that the low-interest rate and relaxed financial conditions keep investors happy throughout the year, Apple may still have significant room for additional growth.
This article was edited by Samburaj Das ******************************
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