Apple price targets reduced as company's growth slows to 'normal' levels

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  • Reply 41 of 100
    focherfocher Posts: 625member

    Quote:

    Originally Posted by Mario View Post


    So they need to focus on a few products and they need more products? Which one is it?

     



    They probably should also lower their prices and increase their margins too.


     


    It's all Business 101! Too bad Apple doesn't know how to run its business.


     


    /s

  • Reply 42 of 100
    philboogie wrote: »
    1000

    Define normal

    Alfred E. Newman?
  • Reply 43 of 100
    focherfocher Posts: 625member

    Quote:

    Originally Posted by herbapou View Post


    Indeed, negative growth is not normal, it just plain sucks.  



    Just making stuff up now? Revenue was up - and that was with one less week of sales, so it was really way up. Profit was flat because of a temporary decrease in gross margin.

  • Reply 44 of 100
    herbapouherbapou Posts: 2,208member

    Quote:

    Originally Posted by pedromartins View Post


    Are all of you guys insane? You people talk like if earnings were bad...


     


    13.1 billion!!! no one is close... and yet the stock goes down. (remember, profit was up 8%. 13 weeks vs 14)



     


    Ok instead of flat they went from 70% yoy to 8% yoy.  Apple is own by mostly "growth funds".  Any companie with that kind of growth deceleration will get hammer to the ground.  Apple need to transition from a growth stock to a value/income stock and to do that they need to rise dividends.


     


    and dont served me that "good use of cash" garbage, they could double the dividend and still continu to pile up cash earnings after earnings. But 4% yield would help make the transition. 


     


    What really hurt the stock is the call, they guide no growth in fiscal Q2 and said they were not  lowballing it from now on.  This is when the stock really tank hard in AH. Horrible conference call, the more they talked the worst it got.

  • Reply 45 of 100
    herbapouherbapou Posts: 2,208member

    Quote:

    Originally Posted by focher View Post


    Just making stuff up now? Revenue was up - and that was with one less week of sales, so it was really way up. Profit was flat because of a temporary decrease in gross margin.



     


    Well they guided Q2 with the same margins, so not so sure its temporary.  And I will served you what the fanboys served the other companies : Apple makes all the profit with a small market share. Guess what, they had 20% and 45% growth in sales for the same profit.  Revenue doesnt mean anything for the stock, EPS is what counts. And margins are still very very high even at 38%, they must continu to come up with top of the line cutting edge products just to stay there.


     


    The most important things to do for growth is to diversified the iphone line with multiple screens and come up with a good low price phone (not cheap, but top of the tine lowcost).  Growth is now in emerging markets and those people cant afford high end phones, even if they finance them.


     


    btw I am not a short term investor , I own stocks and options that expires in january 2015.

  • Reply 46 of 100
    alfiejralfiejr Posts: 1,524member


    let's break it all down:


     


    first, the stock market. there are three kinds of buyers - traders, speculators, and investors.


     


    traders are the pros who make money whether prices go up or down, using all the short term tricks of the trade. they have a big impact on day-to-day stock price movements (like the exact $500 price close recently), but not long term. right now they are either getting out of Apple or making complex trading bets on where it will be in the months ahead. this is pushing the price down presently.


     


    speculators are the ones seeking "growth" stocks based on hype, hope, or some crystal ball that they will go up in price significantly faster than the overall market within months or a year or two. this is the group that has now abandoned Apple and is dumping it, after propelling it upward recently, which is definitely pushing the price down right now.


     


    investors are the multi-year long-term buyers who seek a modest but steady return at low risk that is still better than alternatives like bonds and other financial instruments. pension funds, mutual funds, etc. they pay attention to fundamentals like P/E ratios. they are holding Apple now and will start to buy soon when it stops falling.


     


    second, Apple's business (here are some great charts: http://www.splatf.com/2013/01/apple-dec12earnings-charts/):


     


    as many above note, Apple has gone through a spectacular revenue/profit growth phase in the last five years thanks to the addition of two new hugely successful products, the iPhone and the iPad. it previous two main products, the Mac and iPod are now just modest contributors to its revenues.


     


    so to remain a "growth" stock attractive to the speculators, Apple would need to come out with yet another new groundbreaking product to add to what it has now - every three years! i doubt that is possible in any event. but maybe every five years ... we'll see. we all have our notions about what that could be.


     


    but in any event there are solid prospects for steady and substantial growth in sales for all Apple products except iPods for years ahead. the near-universal shift to portable computing devices is only partly done, and global markets for smartphones/iPhone and tablets/iPad are clearly not yet "saturated" (China!). these are not "mature" markets - that will take 5-10 years - and Apple will continue to take a big chunk of their significantly expanding new revenues until it is.


     


    so successful competition is the only real identifiable risk for Apple in coming years. and that is really up to Apple's leadership team to, indeed, keep making the best products they can. for me, the key indicator of that this year will be iOS 7 and iCloud. both need significant improvements to keep up and surpass the competition. we'll see ...

  • Reply 47 of 100

    Quote:

    Originally Posted by focher View Post


    Just making stuff up now? Revenue was up - and that was with one less week of sales, so it was really way up. Profit was flat because of a temporary decrease in gross margin.





    Temporary?

  • Reply 48 of 100
    Expectation.. That was the word that leads a debacle in Earnings of Apple.Those days are Gone when Markets use to follow Apple.Apple needs to come up with a cheaper Iphone if it really wants to sustain its dominance. Public sentiment is also reversed in few months about apple stock.
  • Reply 49 of 100
    asdasdasdasd Posts: 5,105member
    Part of the problem is Tim cooks leadership. If Apple has no significant new product in the next few years it will be seen that Jobs could produce a product but Cook could not. And we know that Steve thought they had solved the TV interface heuristic years ago. Cook is a conservative. He is managing a low growth dividend paying old school company. A buy back some stock company and dissapear money into nothingness.

    The board should give him 6 months. Get the stock back to a p/e of 15 at least or go. Rehire Forstall. .
  • Reply 50 of 100

    Quote:

    Originally Posted by Bilal jafar View Post



    Expectation.. That was the word that leads a debacle in Earnings of Apple.Those days are Gone when Markets use to follow Apple.Apple needs to come up with a cheaper Iphone if it really wants to sustain its dominance. Public sentiment is also reversed in few months about apple stock.




    You're exactly right. Apple has to lower its margins in order to regain confidence in the market.


     


    (WTF??!!)

  • Reply 51 of 100

    Quote:

    Originally Posted by asdasd View Post



    Part of the problem is Tim cooks leadership. If Apple has no significant new product in the next few years it will be seen that Jobs could produce a product but Cook could not. And we know that Steve thought they had solved the TV interface heuristic years ago. Cook is a conservative. He is managing a low growth dividend paying old school company. A buy back some stock company and dissapear money into nothingness.



    The board should give him 6 months. Get the stock back to a p/e of 15 at least or go. Rehire Forstall. .




    You're right. I remember Steve bringing out a groundbreaking new product every year since 1997. Year after year after year, new technology, new categories.


     


    (Huh??!!)

  • Reply 52 of 100
    focherfocher Posts: 625member

    Quote:

    Originally Posted by focher View Post


    Just making stuff up now? Revenue was up - and that was with one less week of sales, so it was really way up. Profit was flat because of a temporary decrease in gross margin.


     




    Quote:

    Originally Posted by island hermit View Post




    Temporary?



    Yep. This has been explained many times, including by Oppenheimer in the 2012 Q4 earnings call. The simultaneous launch of so many products in parallel required a heavy capital investment. This has created a temporary pressure on gross margins. As the products continue to sell, that margin improves because the capital investment is amortized over a larger volume of units. That's why Apple has been brilliant in using older models to provide lower cost models. I suspect that the iPhone 4 will next be transitioned into the "low cost without a subsidy" model for emerging markets. It makes more sense than the have kept the 3GS for that purpose due to more shared components and manufacturing processes with the 4S (and maybe even 5).

  • Reply 53 of 100

    Quote:

    Originally Posted by focher View Post


    Yep. This has been explained many times, including by Oppenheimer in the 2012 Q4 earnings call. The simultaneous launch of so many products in parallel required a heavy capital investment. This has created a temporary pressure on gross margins. As the products continue to sell, that margin improves because the capital investment is amortized over a larger volume of units. That's why Apple has been brilliant in using older models to provide lower cost models. I suspect that the iPhone 4 will next be transitioned into the "low cost without a subsidy" model for emerging markets. It makes more sense than the have kept the 3GS for that purpose due to more shared components and manufacturing processes with the 4S (and maybe even 5).





    So you're saying that Apple won't be bringing out any new product over the next year?

  • Reply 54 of 100
    asdasdasdasd Posts: 5,105member
    mikeb85 wrote: »
    It's absolutely true when you grow past a certain market cap.  

    No dividend no investors.   A healthy dividend is how Microsoft maintains their market cap.  

    A stock that grows forever is a ponzi scheme.  

    A Ponzi scheme is one where the outgoings inevitably exceed the outgoings. Dividends have nothing to do with Apples price - they have collapsed since announcing dividends.

    The real reason is the assumption that Apple is now going to see margins and EPS fall because of commoditisation. This means Apple need to

    a) release a new high end product ( cough, TV )
    b) recover from sales slowdown with newer lower level products. Hoping for little cannibalisation.

    And stop dividends.
  • Reply 55 of 100
    asdasdasdasd Posts: 5,105member

    You're exactly right. Apple has to lower its margins in order to regain confidence in the market.

    [SIZE=8px](WTF??!!)[/SIZE]

    The market has priced in margins of about 20% today. So , yeah. A low end product and a high end product where sales exploded but margins dropped to , 30%, would see the stock explode.

    For now the market sees Apples only high margin product as stalled in y-o-y revenue and the mini eating into the iPad.
  • Reply 56 of 100

    Quote:

    Originally Posted by asdasd View Post





    The market has priced in margins of about 20% today. So , yeah. A low end product and a high end product where sales exploded but margins dropped to , 30%, would see the stock explode.



    For now the market sees Apples only high margin product as stalled in y-o-y revenue and the mini eating into the iPad.


     


    I wouldn't be so sure about that.


     


    Mini eating into the iPad? Yeah... sure. I think that contradicts what you said in the first paragraph.

  • Reply 57 of 100

    Quote:

    Originally Posted by pedromartins View Post


    Why must Apple innovate at the same pace they did?


     


    They are the only ones doing something relevant at consumer-level... even if they innovate 0 in the next few years, they are still undervaluated. What are the others doing? Nothing! just copying and "bigger screens".


    150 billions on cash, 0 debt and the biggest quarter the world has seen (revenue)?



    Add to that...


    500 million iTunes/App account holders in 150 countries


    250 million iCloud Accounts


    121 Million visitors to abut 400 stores in the quarter


     


    That's a distribution (& money printing) system LIKE NO OTHER!


    Low share price now is a joke.

  • Reply 58 of 100

    Quote:

    Originally Posted by asdasd View Post





    A Ponzi scheme is one where the outgoings inevitably exceed the outgoings. Dividends have nothing to do with Apples price - they have collapsed since announcing dividends.



    The real reason is the assumption that Apple is now going to see margins and EPS fall because of commoditisation. This means Apple need to



    a) release a new high end product ( cough, TV )

    b) recover from sales slowdown with newer lower level products. Hoping for little cannibalisation.



    And stop dividends.


    Are you drunk? Besides the mac (easy explanation.. one less week, problems with demand for retina models (v1.0) and iMac), iPhone growth was huge and iPad growth was out of this world.


     


    What are you talking about, here? People are forgetting that this was the best quarter the world has ever saw (revenue).

  • Reply 59 of 100
    asdasdasdasd Posts: 5,105member
    focher wrote: »
    Yep. This has been explained many times, including by Oppenheimer in the 2012 Q4 earnings call. The simultaneous launch of so many products in parallel required a heavy capital investment. This has created a temporary pressure on gross margins. As the products continue to sell, that margin improves because the capital investment is amortized over a larger volume of units. That's why Apple has been brilliant in using older models to provide lower cost models. I suspect that the iPhone 4 will next be transitioned into the "low cost without a subsidy" model for emerging markets. It makes more sense than the have kept the 3GS for that purpose due to more shared components and manufacturing processes with the 4S (and maybe even 5).

    In fact selling last years model has been an unmitigated disaster. Apple is competing with its own secondary market - second hand devices which you can buy from eBay, Amazon, bob down the road or Apple - is that Apple book a tiny percentage of that market. They would be better served with somebody ignoring eBay and buying a new cheaper device for a present for Mom.

    also better for the recipient. If you get an iPhone 4 now how many years of iOS updates do you get? Answer : N -2 where N is the number of updates the 5 will get. Very close to N-3.

    That's a crap strategy.
  • Reply 60 of 100
    asdasdasdasd Posts: 5,105member
    Are you drunk? Besides the mac (easy explanation.. one less weak, problems with demand for retina models and iMac), iPhone growth was huge and iPad growth was out of this world.

    What are you talking about, here? People are forgetting that this was the best quarter the world has ever saw (revenue).

    Did you mean "seen"?

    I want Apple to crush Android. Not scrape by. This was rubbish.

    Also you highlighted sales slowdown - I meant sales slowdown growth

    Sure there are technical reasons but..... Cook is not achieving.
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