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Here's Why Apple Is Poised To Outperform

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Alpha Stock Advisor


  • Apple's higher-end iPhone X device is set to drive its top line growth in FY 2018.
  • Apple's payment solution Apple Pay to surpass PayPal in North American digital payment space by 2017.
  • Apple to create its first television project of Spielberg’s NBC anthology series “Amazing Stories”.

Cupertino-based Apple (NASDAQ: NASDAQ:AAPL) has a long history of topping Wall Street estimates and the iPhone maker is set to repeat it after the closing bell today. According to Zacks Equity Research, the iPhone maker is expected to earn $1.86 per share on revenues of $51.2bn in the fiscal fourth-quarter 2017, up from $1.66 per share on $46.6bn in the year-earlier period. iPhone shipments, which constitutes between 60% and 65% of Apple’s sales, are projected to reach 46.4 million units in the fiscal fourth-quarter 2017, backed by accelerating sales of iPhone in China. This represents a 2.1% increase from 45.5 million units shipped in the year-earlier period.

While iPhone continues to be the major driver of its top line, Apple’s services segment consisting of App Store, Apple Music, Apple Pay and other services has become a major growth catalyst with over 185 million subscribers. With the release of iOS 11, the company expects to pull in more revenues from its App Store during the quarter. Revenues from iTunes, software and services are expected to be $7.6bn in the fiscal fourth-quarter 2017, up a staggering 20.4% from last year. Additionally, Apple is witnessing strong demand for iPad among schools driven by the wide range of multimedia features of iOS applications focused on the education sector. For the fiscal fourth-quarter 2017, iPad shipments are expected to reach about 10 million units, up 7.4% from the last year.

Apple shares have also recovered from the jolt following the latest iPhone announcement in Sep’17, but there is plenty of uncertainty about the market outlook for its high-end iPhone X. The stock has jumped about 45.5% in the year-to-date period (see the chart below), outperforming industry peers IBM (NYSE: IBM), HP (NYSE: HPQ), Google (NASDAQ: (GOOG) (GOOGL

This article was written by

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I have over five years of experience in investment banking, private equity and corporate finance. I have a Bachelor's Degree in Electronics and Communication Engineering and a Master's Degree in Business Administration. Sign up to receive e-mail alert for articles!

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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