Stock FAQs

why is apple stock so cheap 2021

by Ofelia Fritsch Published 3 years ago Updated 2 years ago
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Should you buy Apple stock for March 2023?

The Motley Fool owns shares of and recommends Apple and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool has a disclosure policy.

Will Apple increase its dividend in 2021?

Apple resumed its dividend in 2012 after a 17-year hiatus, and it has since become a dividend powerhouse. The quarterly payout resumed at a split-adjusted $0.095 and has risen 132% in just nine years. Apple announced this week that it will boost the quarterly payout to $0.22 per share, an increase of 7% for 2021.

Should you buy Apple stock and never sell?

The tech titan's detractors insist that there are no worlds left for Apple to conquer and investors would be better served to put their money elsewhere. Yet even as the most valuable company in the world, there are still plenty of reasons for investors to buy Apple stock and never sell. Let's look at six reasons in particular.

Is Apple stock fairly valued after Q3 results?

Despite Apple’s outstanding fiscal third quarter numbers, reported on July 27, Apple stock ( AAPL) - Get Apple Inc. Report failed to find support. Shares were down -1.2% after the quarterly report, after having dipped another -1.5% on earnings day itself. Some, including BMO Capital’s Tim Long, have argued that AAPL has reached fair valuation.

What is Apple's moat?

Is Apple the most valuable company in the world?

Is Apple too big for its own good?

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Why is Apple's share price so low?

Apple has fallen during a bad week for equity markets, which are selling off stocks in nearly every industry on fears of Fed rate hikes, weakening consumer confidence, rising inflation and global supply chain challenges.

Will Apple stock grow 2021?

AAPL's Stock Price Performance For 2021 Apple's revenue grew by +33.3% to $365.8 billion in FY 2021, and this was the fastest that its top line has ever expanded in the past nine years as per S&P Capital IQ data.

What is Apple's target price for 2021?

Apple Inc (NASDAQ:AAPL) The 39 analysts offering 12-month price forecasts for Apple Inc have a median target of 190.00, with a high estimate of 219.94 and a low estimate of 145.00.

Is it a good time to buy Apple stock?

Apple Valuation also appears reasonable, relative to historical levels. The stock trades at a forward P/E of roughly 23x currently, down from around 31x in 2021 and 38x in 2020. This could make the stock a reasonable pick in the current market.

Will Apple stock ever reach $1000?

Prolific analyst Kuo is predicting Apple hits the market with a mixed reality device next year with a high-end price tag of $1,000. The tech giant plans to release a second-generation headset in 2024 with a goal of selling 10 million units.

Can Apple stock reach $200?

However, there shouldn't be any doubt that AAPL stock has had an unmistakable long-term uptrend over the years. Moreover, given that the company has multiple long-term secular drivers driving its business model, we are confident that the stock can reach $200 in 2022.

What will Apple be worth in 10 years?

The Bottom Line Assuming 18% compound annual growth over the next decade, your $10,298 investment in Apple would be worth $53,898.

Is Apple a buy or hold?

Apple has received a consensus rating of Buy. The company's average rating score is 2.78, and is based on 23 buy ratings, 8 hold ratings, and no sell ratings.

How will Apple stock perform in 2021?

Apple stock returned 35% in 2021; 82% in 2020; and 89% in 2019.

Is it safe to buy Apple stock?

Overall, it's safe to say that Apple's stock is not cheap, but no one can fault an investor willing to pay a premium price for a quality business. For those investors, Apple stock could be a buy right now.

Is Apple a safe long term stock?

“I think Apple, as an investment, is well suited for someone that has a moderate or higher risk tolerance, ability to withstand volatility and a long-term time horizon,” he said. “They are a leader in their industry, and typically that will present a great case for a good long-term investment.”

Is Apple stock overvalued?

As of this writing, we think Microsoft's stock is about 23% undervalued, while Apple's stock is 14% overvalued.

How much has Apple dropped in 2021?

Even with a marked peak in February for a value of $143.16, shares have dropped nearly 2 percent since the first trading day of 2021. Apple's market capitalization of $2.11 trillion doesn't put it anywhere near its 52-week low, so it's still an overall impressive standard for long-term holders.

Is Warren Buffett still buying Apple?

Value investor Warren Buffett is still strong on Apple stock, which suggests that the security holds more weight than the current market cap is giving it credit for. In fact, Apple is by and large Berkshire Hathaway's largest position.

Will Apple have difficulty reaching demand?

Apple will likely have difficulty reaching demand in the next year, which could put a damper on growth. This could be a red flag for growth investors. Tech stocks have been a major target for sell-offs during the second quarter.

The iPhone maker could soon regain its mojo

Harsh has been covering technology, and sometimes retail, since 2011. He is focused on finding great businesses for the long run. You can follow him on twitter @techjunk13

Key Points

Apple stock has slumped in recent weeks despite reports that the iPhone 13 is in great demand.

Apple's about to deliver impressive growth

Recent reports suggest that Apple's iPhone 13 sales may be restrained by supply chain restrictions. The iPhone maker may have to lose out on sales of up to 10 million units of the iPhone 13, as a worldwide semiconductor shortage could cripple its production lines.

Don't miss the big picture

Investors shouldn't worry much about the near-term problems that may hamper Apple's iPhone production, as the company has a lot of room for growth in the 5G smartphone era thanks to its huge base of users.

What is Apple's moat?

Intangible Assets: This includes things like brand value, patents, and regulatory protection. This is Apple's key moat. Its brand is the most valuable in the world , and patents on in-house developed chips are a key differentiator. No moat will ever mean that a business is safe forever.

Is Apple the most valuable company in the world?

It's true , Apple is the largest, most valuable company the world has ever known . With a bump of just 10%, it would become the history's first trillion-dollar organization. But while the law of large numbers does make sense on paper, Apple's not so big compared to its peers that it should necessitate such a discount.

Is Apple too big for its own good?

Apple's simply too big for its own good. Apple isn't growing as fast as the other three. But while these make sense on the surface level, I simply don't think they explain the heart of the matter. There's only one plausible explanation: Apple's moat is nowhere near as wide as those of the other three, and the market knows it.

NASDAQ: AAPL

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Despite the stock's outperformance recently, it still looks like an attractive investment today

Shares of iPhone-maker Apple ( AAPL 1.67% ) have been on a tear recently. The stock has gained 19% over the past 30 days. This obliterates the S&P 500 's 0.3% gain over this same time frame.

A quality business

Investors who take time to look into the fundamentals of Apple's business will quickly realize that there's a lot to like. Circling back to the company's most recent earnings report, Apple demonstrated soaring revenue and earnings per share.

A conservative valuation

With financials like this, investors might expect that Apple stock's valuation is very pricey. But even after the shares' recent 19% gain, that's not the case.

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Even as the most valuable company in the world, there's still lots to like about the iPhone maker

Apple ( AAPL -2.59% ) made history on Aug. 2, 2018, when it became the first U.S. public company in history to achieve a market cap of $1 trillion. Since then, the company has maintained and even extended its lead on the competition, currently clocking in at roughly $2.25 trillion.

1. The Warren Buffett seal of approval

Investors could do far worse than follow the example of legendary money manager Warren Buffett. Since taking the helm of Berkshire Hathaway in 1965, the so-called "Oracle of Omaha" has led investors to breathtaking returns, delivering a compound annual growth rate of more than 20%.

NASDAQ: AAPL

Buffett has made no secret of his love of Apple, saying "It's probably the best business I know in the world." He's gone even further, noting:

2. The resurgence of the iPhone

It wasn't terribly long ago that some were declaring the death of the iPhone, but the release of its latest device product lineup has shown that simply isn't the case. Apple launched four new iPhone models in 2020 -- the most ever released in a single year.

3. Apple: It's what the fashionable are wearing

Investors shouldn't underestimate the growing importance of Apple's wearables business. In fiscal 2020 (ended Sept. 26, 2020), the company's wearables, home, and accessories segment grew 25% compared to 2019, generating a record $30 billion and accounting for more than 11% of Apple's total revenue.

4. It's all about the services

Cook announced in early 2017 that Apple was aiming to double its services revenue by the end of 2020. In July 2020, he revealed that Apple had achieved that lofty goal a full six months ahead of schedule.

5. Dividends: The gift that keeps on giving

Apple resumed its dividend in 2012 after a 17-year hiatus, and it has since become a dividend powerhouse. The quarterly payout resumed at a split-adjusted $0.095 and has risen 132% in just nine years.

Apple is just getting started in 5G smartphones

The success of Apple's 5G iPhones catapulted the company to the top of the smartphone sales chart last quarter. The company should be able to build upon that success, as iPhone 12 demand continues to outpace supply.

A great chance to buy

Apple's dip has made the stock cheaper than last year. It is trading at just under 33 times trailing earnings, compared to 2020's average price-to-earnings (P/E) multiple of more than 40. The current price-to-sales ratio of 7.1 is also lower than last year's average of nearly 8.5.

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How much revenue did Apple make in 2020?

In addition, Apple achieved record revenue in every one of its geographic segments. In total, revenue for the period was $111.4 billion, up 21% year over year.

Is Apple a competitive company?

However, Apple has strong competitive advantages, putting it in a position to continue growing its active installed base in the coming years. After years of delivering quality hardware, software, and services to its customers, the company has earned strong brand power and customer loyalty.

Does Apple lose its pricing power?

Further, Apple has shown no signs of losing its pricing power.

What is Apple's moat?

Intangible Assets: This includes things like brand value, patents, and regulatory protection. This is Apple's key moat. Its brand is the most valuable in the world , and patents on in-house developed chips are a key differentiator. No moat will ever mean that a business is safe forever.

Is Apple the most valuable company in the world?

It's true , Apple is the largest, most valuable company the world has ever known . With a bump of just 10%, it would become the history's first trillion-dollar organization. But while the law of large numbers does make sense on paper, Apple's not so big compared to its peers that it should necessitate such a discount.

Is Apple too big for its own good?

Apple's simply too big for its own good. Apple isn't growing as fast as the other three. But while these make sense on the surface level, I simply don't think they explain the heart of the matter. There's only one plausible explanation: Apple's moat is nowhere near as wide as those of the other three, and the market knows it.

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