Apple Stock Price Has Worst Drop In 4 Years
Friday saw Apple Inc. share price fall during trading hours, despite NASDAQ: AAPL beating out analyst predictions with its Q3 results. However, Apple did announce that it would not be revealing unit-sales figures for the iPhone or hardware products anymore.
Not to mention, Thursday evening was when Apple delivered lackluster iPhone sales, causing the stock price to fall even further.
Apple share price dropped by 6.6% on Friday, in the worst single-day fall since January, 2014.
Analyst’s opinions were mixed after Apple’s Q4 report, many claiming that the change in unit reporting will benefit Apple. By stopping reports on unit-sales of the iPhone and hardware products, Apple forces analysts to look at their growing services business. Other analysts have said that that the decision will hurt Apple as investors will not be so keen on investing on a company that doesn’t disclose such an important metric. It is thought that Apple “has something to hide”.
It has not been completely accepted by analysts that Apple can make up for the lack of unit-sales reporting by giving more insight into their services business. Apple CFO, Luca Maestri has said that Apple would report on the gross margin of services, which is a new metric to be reported for Apple. BTIG analyst, Walt Piecyk doubts that Apple will be as transparent as they say when it comes to their services business.
“Services businesses report the total number of active users and churn,” said Piecyk.
Apple Stock Future
In recent times, it’s arguable that Apple is not as focused on gaining market-share like it once was. Instead, it seems like Apple is now more focused on dominion over the high-end side of its markets.
Apple is still selling colossal amounts of iPhones, iPads and computers. But the number of units-sold is not increasing much year-over-year. With that being said, the average selling price of Apple’s devices is higher than expected ($800 rather than $750). For Apple’s bottom line this means that if iPhone sales decline, the increase in price will offset it. For investors, this is good news as profits for Apple are not likely to drop significantly even if the company sells less units. This ensures the Apple stock price is stable.
In the future, some analysts are predicting that the average selling price of an iPhone could reach levels near $1000.
Apple Stock Price Analysis
Apple lose its $1 trillion market cap value on Friday after the Apple share price dropped by over 7% reaching a four-year low of $206.66.
The September quarter report showed an earnings per share of $2.91. The expected earnings per share was $2.78. Revenues posted were $62.9 billion, with expected revenue of $61.46 billion. Although revenue beat out performance, iPhone sales of 46.9 million were just below analyst prediction.
If you are an investor who doesn’t trade on headlines, then the stock price drop may prove to be a good time to buy AAPL shares.
In summary, the main reason for the Apple stock price is because of the new reporting metric and removal of the units-sold metric.
Apple Inc. stock rating is a BUY from our analyst
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