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Is Apple Stock A Buy Or Sell After Recently Announced Earnings?

Aug. 04, 2021 9:00 AM ETApple Inc. (AAPL)73 Comments


  • In last week's earnings release, Apple posted record-setting June quarter results, with total net sales of $81.4 billion, up 36% year-over-year.
  • Yet, warnings about supply chain constraints and service revenues returning to more typical levels took its share price by surprise, with a same day drop of as much as 3%.
  • However, the headwinds are expected to be temporary with no significant impacts to Apple's long-term growth prospects and valuation.
  • Apple is expected to keep delivering unprecedented growth, underpinned by continued global demand for its products and services in the long run. And the recent price pullback makes a great buy opportunity for those looking to participate in the company's long-term gains.

Apple CEO Tim Cook Delivers Keynote At Annual Worldwide Developers Conference
Justin Sullivan/Getty Images News

Just a week ago, Apple (Nasdaq: NASDAQ:AAPL) reported record-setting June quarter results that had crushed market expectations. The Cupertino-based tech giant recorded largest quarterly revenues ever of $81.4 billion, which were up 36% from the prior year and outperformed

This article was written by

Livy Investment Research is a technology sector research analyst providing long investment ideas by uncovering hidden value ahead of the tech innovation curve.

Livy runs the investing group Livy Investment Research. They provide deep-dive coverage, interactive financial models, industry primers and community chat. Livy covers companies that are playing a fundamental role in tackling existing technology hurdles capable of capitalizing on long-term growth frontiers. They include electric and autonomous vehicles, semiconductors, cloud-computing, AI/ML, cybersecurity, and analytics – all of which are disrupting legacy norms and contributing towards a more efficient, value-adding economy. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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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Comments (73)

JSB163 profile picture
Given all the naysayers usual comments over the decades, I must say that the only issue holding back apples growth is their ability to hire more talented engineers, software and marketing professionals. IMO
It all hinges on whether or not they can continue to convince their technically impaired users and status symbol seekers to continue buying extremely high profit devices they don’t really need.
The pandemic continuing would probably help in that regard. They would get a lot of the money that would otherwise go to expensive vacation trips.
They will have some headwinds, if all the people who really cared about 5G already bought their phones in the last six months to a year And the variant virus Becomes less concerning to the general public.
What they should really do to maximize shareholder value is turn Mac Pro hardware design over to a newly purchased PC vendor turned Apple subsidiary, who could make sure it gets upgraded every year to keep up with the competition and possibly even price it affordably enough for companies to consider buying.
I can make a Mac Pro that would outsell what Apple is selling in my garage
vicwinkler profile picture
@donfdraper eh, you want to know something?
(1) More than 75% of the highly-educated and technically top-tier cyber security engineers I have worked with prefer MacOS -- the second choice has been Linux.
(2) I generally get about 7 years out of one of my Apple computers. And, I absolutely upgrade the OS within a year of a new major release (always surprised at how well and fast it runs when I do). I also am still quite happy with my iPhone X. And multiple older devices, including: Several iPads and several Mini's...

So, I don't know on what basis you formed your opinion but it is way out of line with what I see in my world. From your last sentence alone it is hard to form any opinion other than you are arrogant and possibly delusional
@vicwinkler (1) "Macs have long had a reputation of being more "secure" than Windows PCs, with users believing that Apple machines are impenetrable to cybercriminals planning to carry out malware attacks. But the reality is less clear-cut. Data shows that both platforms are plenty vulnerable to security threats. According to the most recent State of Malware Report from information-security company Malwarebytes, in 2019 the average Mac faced more malware attacks than the average PC did, for the first time ever. Not only was there a significant increase in the overall prevalence of threats against Macs in 2019, but the number of attacks per Mac was almost double that of PCs."

Apple also abandons iOS much sooner than Windows devices are left behind, tempting owners of expensive iPad Pros to consider using them without security updates. A dual-core desktop from 2009 will be able to securely use Windows 10 through 2025.
(2) My 12 year old dual-core Windows tower system works just fine with Windows 10 for web browsing, Microsoft Office, email and just about any other use except playing first person games. There are many equally "ancient" Windows PCs used in industrial applications because of their using proprietary applications. Tower PCs do a much better job of dissipating heat for heavy duty use compared to Apple's relatively svelte artistic designs, leading to better long-term reliability. You can actually upgrade a Windows PC's hard drive, memory or video card yourself with minimal skills. The business world has Wintel and Linux workstations, not Apple's alternatives, with few exceptions
The delusional people are the ones thinking they're getting a "better deal" without bothering to compare the specifications, benchmark scores or prices of potential alternatives. Rational buyers dig into the facts underlying marketing hype. Trust the experts, not other naive consumers having opinions based on outdated and inaccurate information.
vicwinkler profile picture
@donfdraper I think the evidence is clear that the Apple platforms are less vulnerable, but yes, they are still vulnerable.

As a published author, former researcher and technology leader in cybersecurity I am not going to change your opinion about this field.

The question when you buy a computer is not just price, and in my case I value the lack of irritation of chasing down some obscure control in an app on Windows. In contrast, MacOS and iOs have actual user-centered design principles that put the user experience front-and-center. Again, I value that and am happy paying for it. Don't presume that your metrics for "low price" are metrics that I think are key. I don't know what you drive, but our decisions on buying cars are also more than cost...
SEC Investigator2 profile picture
For those who are totally clueless, yesterday between 3:58-4:00PM, 6M fake shares were dumped to drop Apple down. During AH's trading, those same criminal manipulators bought 2.4M shares off those fake shares. The 4-1 split has allowed this type of stock/option manipulation. The purpose of the so called buybacks was to reduce the share count. The 4-1 split dumped 16B shares on the open market, equivalent to a dump truck of jelly beans dumped in the auditorium of a elementary school. Hope I simplified this enough for the clueless.
@SEC Investigator2 and you know about these fake share drops how?
Finally, an author who understands that supply chain problems are only indicative of a larger and prolonged super cycle. More I hear about supply chain problems, I get more optimistic about AAPL LEAPS.
What recent pullback are you talking about? Apple is still hovering around all time highs.
I have held $aapl since the days of Steve Jobs! I can’t begin to tell you how as an investor I have been rewarded 10 fold. I continue to add and every time I here “ wait for it to drop” I chuckle, because clearly, the naysayers never held aapl, or realize this is one every investor in individual stocks must own. I gather double digit growth has no meaning to some, nor does buybacks, or increased dividends. Some of you are best off investing in gme or amc..
Livy Investment Research profile picture
@deadhead213 Thank you for your comment!

Apple has been and continues to be one of the most rewarding long-term investments to hold on to. Their business has demonstrated an ability to generate significant yet sustainable growths since the Steve Job days and now again under Tim Cook’s leadership, which paves way for further promising price hikes in the next five years.
wait for $125 or less......the stock should have rallied on the numbers....it didn't...so, the market is saying wait.....take profits.....reengage at a lower entry.
If you are a long term Apple investor, take some off the table....reallocate....convert an 88 cent dividend to a $5.20 dividend.....no brainer.....
@Zephyr512 Sell Apple and give 20% of my profit on 1500 shares to Biden and Newsom? Then wait until Apple drops 20% to buy it back seems like an exercise in futility. I think I'll just keep holding Apple instead of flushing my money down the drain!
mako26 profile picture
@Zephyr512 what's your approx target date for $125 ? 60 day window ??
Macking profile picture
3% can hardly be classified as a pullback, but okay. Difficult to argue against the numbers that $AAPL has put up, but I sold at $147 yesterday. I think its stretching its valuation for the time being. I rather put the funds to work where I think there is greater near-term upside ($AMZN for one, especially if Delta continues on its current uptrend). I’ll be a buyer again the next time it dips below $115. I think we may get a chance this fall.
Seekingbuddah profile picture
@Macking dip below 115 good luck waiting on that.
Livy Investment Research profile picture
@Macking Thank you for your comment.

A dip below $115 is quite unlikely for Apple under its current operating environment and business outlook. The company’s EV/EBITDA would have to fall closer to 10x compared to its current near-20x and/or grow sales by under 5% on an annual basis to reach a price this low, which does not align with its current growth trajectory even with headwinds related to supply constraints and inflation.
@Macking sold entire position? there hasn't ever been a good time to not own any aapl. it should always be a core position, snipping some off when you believe it overvalued, adding when undervalued. that's been my aapl plan for 2 1/2 decades.
Its always a buy at any price. Don't even waste time with valuations just buy it and retire early.
@Randol33 if the goal is to sell any asset at a higher price at a later time, overpaying makes that increasingly difficult. no asset should ever be bought at any price or as buffett says, "whether stocks or socks, i want to buy them on sale."
WARNING isn't even close to the right word for your title! You probably know that as well. Lowered expectations, maybe. Warning not even close!
All the bears told me that Apple is worth $60-90 a share.... huh
Someone that spends that much time pointing out nothing must have an agenda. The question isn’t that complicated.
vicwinkler profile picture
@Tarheeboy9712 You think the author isn't pointing out anything, and yet it is pretty clear to me that the point of the article was to survey the issues that are relevant to a discussion of APPL stock price ...and he did a pretty good job of that. If you are looking for a simple answer like "GREEN" versus "RED" or "invest" versus "don't" you might be a superficial investor ;-)
Livy Investment Research profile picture
@vicwinkler Thank you for your comment and appreciate the support. I hope you’ve found the article helpful!
vicwinkler profile picture
@Livy Investment Research You are welcome. It seems the comment section is a place where some come to vent —or groundlessly speculate— in public.
Maybe I missed it, but what is your time frame for the target price?
Livy Investment Research profile picture
@NotYetRetired Thank you for the comment!

$170 is our 12-month price target and is updated on a moving basis based on any material information made available on Apple, including periodic earnings releases and/or news related to transactions and securities offerings.
@Livy Investment Research thank you. I willing to bet that AAPL hits $170 well before that.

Yes, I’m a fanboy, but AAPL has been very good for me. I started buying about 30 years ago and have kept accumulating. I don’t wait for dips. I just buy when the cash is available like in a week or so when the AAPL dividends are paid.
cachinga profile picture
Could the penny pinchers at Apple squeeze out a bit more dividend since they are doing so well?
Livy Investment Research profile picture
@cachinga Thank you for your comment!

Although Apple’s dividends may seem low compared to its cash balance, its total cash returned to shareholders including share repurchases was more than $20 billion during the June quarter, which represents almost 20% of its TTM EBITDA. This compares to industry peer Microsoft’s $10.4 billion returned in the most recent quarter, which represents a little under 13% of its TTM EBITDA, making Apple’s payout quite attractive for a growth tech company.
@cachinga I'd prefer they continue their massive buybacks so I won't have to pay taxes on dividend payments.
cachinga profile picture
@atdh1 I'm in it for income, rarely share price but after awhile really their dividend is too low for such touted stock..
Appleguy58 profile picture
What ever the earning announcements are Apple 🍎 is always a buy after any pull back.Long,Buy & hold.Where can you go out and buy a company of this magnitude for $145 ish 🤷🏼‍♂️🤷🏼‍♂️
Pretty simple decision re Apple stock: buy and hold. Next 6 months should realize seasonal gains for Apple globally! It is a beast of a company and it’s products are desired by the consumers across the globe.
InvestInMETA profile picture
AAPL is a buy and hold, always and forever. Anyone who says different is not worth taking financial advice from.
Livy Investment Research profile picture
@jgoldston0 Thank you for your comment!

Apple is definitely a strong pick for those looking for a reliable and profitable long-term investment to add to their portfolios considering their robust liquidity, and continued ability to generate demand and sales growth through innovation.
@jgoldston0 nothing is forever but Apple is close!
SEC Investigator2 profile picture
Your valuation is almost spot on as my valuation. It is so spot on I thought I wrote it.
Damoni Kennard profile picture
@SEC Investigator2 Dear sir I'm shocked. You're not bashing the Apple CEO or CFO in this comment? What happened, are you ok?
SEC Investigator2 profile picture
@Damoni Kennard
Trust me, Apple would be a much better company without Cook and his hand puppet Luca. Luca probably is the worst CFO in the industry.
@SEC Investigator2 The real question is: Who can do more damage to a company, its CEO or its CFO? Bad CFOs earn their outsized salaries simply by looking for loopholes and playing games with numbers. But just consider the likes of Bernie Ebbers, Ken Lay, and Jeff Immelt (among others). Thus, when I find myself preparing for a year-end portfolio tax-loss, I find that nothing beats an incompetent CEO.
I own too much of apple and won’t to lighten a little, but keeps making me lots of dough
Appleguy58 profile picture
@skeeter721 always good to take some profits.Apples making me lots of Apple pies 🍎🥧🥧
mako26 profile picture
@skeeter721 right ??/ I as well .. I'm pulling some cash together to buy some NXPI and XLV. but not from apple ..Waiting for fall rally to sell my Jan 2022 $140 calls up %90 .. I own the stock and other calls 1 and 2 years out ..but it's tough to sell apple
Buyandhold 2012 profile picture
Apple is now a HOLD.
bart_sst profile picture
@Buyandhold 2012 : Yep, it's a buy and hold just like your name says.
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