Apple Stands to Benefit from the Recent Tax Reform

With the new tax laws in place, corporations stand to benefit and Apple is no different. In response to the recent changes, Apple plans to bring back a large portion of their oversea money and put it to use in the United States market. Even though the company is bringing money back, they still must contend with the face iPhone X sales have not been the best. Certainly they have been acceptable, but Apple has created a high level of standards for themselves.

Published over a year ago
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Reviewed by Ellen Johnson

Goldman Sachs came out and rated Apple with a neutral and placed a price target of $161 on the stock. They were quoted as saying the iPhone X was a “not so super cycle”. However, to help the news of lackluster iPhone sales, Apple continues to grow their music streaming service monthly by 5%, compared to 2% for Spotify, according to the WSJ. Not only that, but with the addition of Apple’s home device, the product diversification is helping the company to rely less on iPhone revenue.

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Apple income statement, its balance sheet, and the statement of cash flows. Potential Apple investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Apple investors may use each financial statement separately, they are all related. The changes in Apple's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Apple's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Apple fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Apple performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Apple shares is the value that is considered the true value of the share. If the intrinsic value of Apple is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Apple. Please read more on our fundamental analysis page.

How effective is Apple in utilizing its assets?

Apple Inc reports assets on its Balance Sheet. It represents the amount of Apple resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Apple aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Technology Hardware, Storage & Peripherals space. To get a better handle on how balance sheet or income statements item affect Apple volatility, please check the breakdown of all its fundamentals.

Are Apple Earnings Expected to grow?

The future earnings power of Apple involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Apple factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Apple stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Apple expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Apple earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Apple dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Apple one year expected dividend income is about USD0.63 per share.
At this time, Apple's Dividends Paid is quite stable compared to the past year. Dividend Payout Ratio is expected to rise to 0.16 this year, although the value of Dividend Yield will most likely fall to 0.01.
Last ReportedProjected for 2024
Dividends Paid17.3 B18.1 B
Dividend Yield 0.01  0.01 
Dividend Payout Ratio 0.14  0.16 
Dividend Paid And Capex Coverage Ratio 31.27  32.83 
Investing in dividend-paying stocks, such as Apple Inc is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Apple must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Apple. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

Apple Gross Profit

Apple Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Apple previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Apple Gross Profit growth over the last 10 years. Please check Apple's gross profit and other fundamental indicators for more details.

Going after Apple Financials

One of the risks that could restrain the stock from going higher is the increase in bugs with the iPhone, along with the battery issue in older iPhone models. Brand image is something Apple has maintained for several years but seems to be slipping a bit. Samsung went through their own issues with their phones catching fire, but has since rebounded nicely.  

The home device Apple has come out with is getting average revues, but it is early on. People are saying Amazon’s home device is better but you’ll have to dig deeper and try to find the percentage of people that own Amazon’s device over Apples. If not many people own Apple’s device, then the data may be skewed.  

What to look for ahead would be the quarterly conference call after all the dust has settled and to gain a firm understanding of where the company is headed. The latest iPhone has been subpar according to many and with other bugs occurring, people could look to switch brands. Also, ensure you are watching how the HomePod is being adopted because it could be a sign of things to come. People are brand loyal and those loyal to Apple will certainly jump on this product train.  

These products are allowing revenue to be generated outside of the iPhone. For so long, the company depended on the iPhone and since the evolution of the Apple product line, which is becoming lesser. Still, the company relies heavily on those sales and if the new iPhones continue to fall short of their sales expectations, it could spell trouble for the short term.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Apple Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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