Apple has been facing a continuous decrease in the share prices since April when it reached its highest price of all time. Since then, 9% shares have been fallen down. It further fell by more than 10% compared to its highest share price in the previous week but again slight increase have been seen.
What does this mean? Has Apple reached its peak and it has become a history now or it is just an opportunity for buying?
Activist investor Carl Icahn has values Apple and according to him it could be more than double and due to that worth of Apple would above $1 Trillion. The shares of the company are valued at 12 times earnings estimates for its next fiscal year while its competitors Microsoft and Google are seen to be trading their shares at 17 times earnings estimates for the next year.
Apple has $193.5 billion in cash and it has a plan to buy back around $140 billion in stock which will ultimately enhance the earnings per share.
Apple is going to reveal its quarterly reports on July 21 and according to the expectations of Wall Street, a rise of above 40% would be seen in the profits compared to the last year while the sales will show an increase of 30% which the situation is not similar in case of broader market and tech industry. Speculations about the S&P 500 are telling the decrease in the earnings by almost 4.5% and the tech earnings are expected to be almost same.
Sales of PCs are not the same as they were earlier but the sales of Macs which are considered a significant part of the Apple’s business are growing. Apple is the fourth largest maker of computers and the top three which are Lenovo, HP and Dell, all have to face the decrease in their market share.
Things to Affect Apple
China is the country which has been giving a large part of sales to Apple. In the previous quarter, China has been responsible for around 30% of the sales for the company but Chinese economy whose growth is slowing down will affect the sales of Apple and moreover, the strongest competitor in the Chinese mobile phone market, Xiaomi is giving a tough competition to Apple.
Apple has the 70% of its overall sales from smart phones and since the success of its larger phones, iPads have gone obsolete.
Apple watch which showed a great success and were sold out in a quick period but after that the sales fell down.
Sales of the Apple are expected to grow by 40% but this growth will not be seen again and again. An annual earnings growth on average has been predicted to be 15% for some coming years.