Apple Inc.

Q2 In Line/Weak Management Guidance for Q3

Published: 11/29/2023

Author: Sid Rajeev, B.Tech, CFA, MBA

Thumbnail of the report Q2 In Line/Weak Management Guidance for Q3
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Sector: Technology | Industry: Consumer Electronics

Ticker Symbols:AAPL - NASDAQ 🔹AAPL.NE - CNQ 🔹
Rating and Key Data
MetricsValue
Current PriceUS $125.25
Fair ValueUS $1925.35
RiskN/A
52 Week RangeUS $
Shares O/S (M)N/A
Market Cap. (M)US $
Current Yield (%)N/A
P/E (forward)N/A
P/BN/A

Report Highlights

Highlights

Q2-FY2023 (quarter ended March 2023) revenue and net income were down 3% YoY, but in line with our forecasts. Q1 revenue was down 6% YoY.

Stronger revenue from services (5% YoY) and iPhone sales (2% YoY) was more than offset by weaker sales of Mac (-31% YoY) and iPad (-13% YoY). Management expects Q3 sales to contract 3% YoY as well.

 

 

We believe continued growth in revenue from services is highly promising, bringing more stability to AAPL’s revenue. At the end of Q2, there were 975M paid subscribers, up from 900M at the end of Q1.

Key Financial Data (YE Sept 30, $M) 2017 2018 2019 2020 2021E 2022E
Cash, cash equivalent and marketable securities 268,895 237,100 205,898 191,830 184,620 189,006
Working Capital 27,831 15,410 57,101 38,321 56,547 80,773
Total Assets 375,319 365,725 338,516 323,888 327,615 341,152
Revenue 229,234 265,595 260,174 274,515 351,984 385,856
Net Income 48,351 59,531 55,256 57,411 92,361 101,182
EPS Diluted ($) 2.32 3 2.99 3.28 5.5 6.03

 

Apple financial Chart

 

 

Relative Valuation - AAPL  
EPS 2022E ($) $6.29
EPS 2023E ($) $6.74
Target P/E multiple for 2022E (x) - 20% premium to avg 29.1x
Target P/E Multiple for 2023E (x) - 20% premium to avg 25.9x
   
Fair value per share ($) - P/E Multiple (2022E) 182.81
Fair value per share ($) - P/E Multiple (2023E) 174.61