Apple Inc. (NASDAQ:AAPL) Not Ripe For Growth, An Overvalued Hardware Stock?
Analysts from UBS looks at Apple Inc. (NASDAQ:AAPL) as not being ripe for growth but remains a good stock nonetheless.
As how analysts perceived, Apple is already a matured stock as it announced its updated earnings. Although the iPhone sales plummeted from 83 percent in F2011 to 71 percent in F12, 16 percent in F13 and 6 percent in F14, iPad sales jumped high by 3 percent in F13 to 14 percent in F1Q.
iPhone sales are expected to increase with the China Mobile deal, launch new products for the year and capital returns.
Why it remains a good stock still?
Valuation as Apple Inc. is estimated to still be at $625. The stock remained a strong trading stock as investors usually bite when a stock is at its weakest.
ValueWalk sees a good valuation and technical support at $485 with a price target of $625 per share based on a NTM EV/FCF multiple of 9.5x, more in line with other large cap tech names.
But analysts at Seeking Alpha were pessimistic about Apple stock as it sees Apple as only an overvalued hardware stock. An article said it is surprising that investors remained bullish about Apple shares - AAPL at $1000 per share - while the stock performed poorly in 2013 with only 2 percent pulling the 20 percent supposedly returns for the NASDAQ and S&P500.
"Despite this, investors have had a hard time letting go of the story. We cannot understand this. Apple just reported calendar 4Q13 revenue of +6% YOY, while Google (GOOG) just reported 4Q13 revenue growth of +17% YOY, and Facebook (FB) just reported 4Q13 revenue growth of +63% YOY. AAPL bulls seem to be holding onto the past a little too tightly, in our view, and with too much emotion and wishful thinking neither of which are conducive to picking winning stocks."
"...the smartphone market is increasingly saturated, and we believe price, and not new features, is becoming the larger concern for a vast majority of purchasers. Moreover, the last several versions of the iPhone were not very innovative, and did not include significant new features, in our view. In short, we believe that Apple is essentially a hardware stock, and at 1.8x EV/Sales, is trading at a significant premium to peers."
Meanwhile, Apple's real-time quote as of Feb. 4 published by NASDAQ OMX is at $508.20, with 1.32 percent increase from previous closing at $501.53, today's high at $509.45, today's low $502.26, week's high at $575.13 and week's low at $385.10.