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AAPL Stock: 123.93 ( -0.5 )

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AAPL to report 2nd best quarter?

updated 10:30 am EDT, Tue April 11, 2006

AAPL 2nd best quarter?

American Technology Research senior analyst Shaw Wu today commented on Apple's forthcoming report of its March quarter financial results, and believes the company will report the second best quarter in its 30 year history. Wu says Apple may exceed its guidance of $4.3 billion in revenue and $0.38 in EPS, modeling $4.4 billion, $0.43, and 8.8 million iPods versus a market consensus of $4.6 billion and $0.44. "We continue to believe Apple will guide conservatively reflecting efforts to reduce inventory of PowerPC Macs and older iPod nanos," Wu wrote in a research note obtained by MacNN. The analyst said that consensus revenue estimates for the June quarter remain unrealistically high, however, and warns that Apple will likely make another attempt to reset expectations. American Technology Research maintains a "Buy" rating on Apple's stock.

Citing the recent 16 percent run-up in Apple shares, Wu said he would not be surprised to see a pullback post-print. The analyst said he finds Apple's valuation very inexpensive, and suspects the company is ready to deliver upside with strong second-half seasonality along with solid product momentum, including a new low-cost Intel portable notebook and changes in its iPod line-up.

"We find the risk-reward on Apple shares attractive trading at 26x our calendar year 07 EPS of $2.59 (22x excluding net cash), indicating a PEG ratio of 0.8 for a company we are modeling to grow 35 percent over the next 12 months," Wu wrote.

The analyst thinks Apple's move to digital entertainment is a multi-year trend, and that the company is ready to capitalize with its unique, defendable iPod + iTunes and Mac franchises.

"We believe Apple is well-positioned to continue above market growth rates with arguably the industry's most powerful and complete stack of hardware, software, and service addressing the digital entertainment space," Wu noted.




by MacNN Staff

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Comments

  1. jarod

    Joined: Dec 1969

    0

    The problem

    is that the AAPL stock has been affected by reasons that have no relation to it whatsoever. The God damn oil prices have been f**king up everything every f**king day!! What I don't get is why AAPL investors let this influence their holding positions on the AAPL stock. I can see why one would dump other casual stocks held in a portfolio but AAPL?? If people would simply take a moment to 'THINK" sensibly dammit. Pathetic that the only way to make money on a growing stock is to short it!

  1. Albert

    Joined: Dec 1969

    0

    Think long term on aapl

    jarod, where do you think aapl's stock price will be in 15 years?

    I think it will split 5 times, at least, which would make it a big money maker for all long haulers...

  1. jarod

    Joined: Dec 1969

    0

    Albert

    I totally agree with you. If Apple continues to perform and wow the way its doing these days; you're 100% right. Problem is, we need more 'intelligent' investors. Right now there seems to be too many beginners messing things up. Kind of the same reason why you should never play blackjack at the $5 table because that's where all the morons play for themselves and in the end cause you to lose more money than if playing on the higher stakes tables where everyone plays together against the house.

  1. dashiel

    Joined: Dec 1969

    0

    i hate...

    how apple stock tanks the day after good news. i just don't have the time or patience to day trade and buy up prior to an announcement and sell at the close.

  1. jarod

    Joined: Dec 1969

    0

    dashiel

    you can thank those 'morons' that know nothing about investing but wishfully think they will be become millionaires by taking the advice of 'analysts' (the worst thing you can do, if thats ALL you do)...a smart investor does HIS OWN research first.

  1. kw99

    Joined: Dec 1969

    0

    It's because of the

    novice investors (the "morons") who "buy high and sell low" that people with better investment discipline can make money. I would be saying thanks...

    In the time frame of 1 to 5 years, AAPL will most likely be up significantly. In the time frame of a few days, it is unpredictable.

  1. testudo

    Joined: Dec 1969

    0

    Re: the problem

    is that the AAPL stock has been affected by reasons that have no relation to it whatsoever. The God damn oil prices have been f**king up everything every f**king day!! What I don't get is why AAPL investors let this influence their holding positions on the AAPL stock.

    Who says it is? Stock prices go up because more people want to buy then want to sell. It goes down for the exact opposite reason. Once it hit $85, you had to believe it was going to sell, because there are those who want to lock in their gains. Then, as that drives the price down, others do the same, knowing they can rebuy once it flattens.

    But, besides that, it hasn't moved much since it flattened out at $62 or so (with the exception of the spike after the boot camp announcement). But that just means no one's buying (or there's no demand). And why should there be. Nothing's happening with the company at this point to warrant a purchase. Sure, long term, you could argue, but most large investors don't invest long term. That's why they cared when apple said Q2 would be down, because they cared about 3 months, not 3 years.

    I can see why one would dump other casual stocks held in a portfolio but AAPL?? If people would simply take a moment to 'THINK" sensibly dammit.

    Right, other stocks are casual, but Apple stock is for 'real' investing, and should not be cut loose ever.

    Pathetic that the only way to make money on a growing stock is to short it!

    Hey, its the stock market. Since when does anything have to make sense?

    And why does any of this bother you? Right now, you should be buying more and laughing at all the idiots who sold, knowing you'll be raking in the dough. If you're investing for the long-term, who cares if apple stock plunges to $60 a share, let alone to $10? You know it'll fly back up to new heights, splitting 5 times in the next 10 years (yeah, right, ain't going to happen) and you'll be laughing all the more to the bank.

    Oh, and i love how you nicely want everyone out of the investing world except those that 'know' what they're doing (which is odd, because most of the people who supposedly know what they're doing are usually slammed for saying negative things about apple). And, BTW, a lot of those novices are also buying apple despite analysts, because they like the company.

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