Apple’s computing products have seen the most luck in recent years, as demand for remote operating and learning has declined in the wake of the pandemic, PCs and tablets generally coming into contact. By comparison, Apple’s Mac profits fell 34% to $7. 6 billion in the fourth quarter, while iPad profits were $6. 4 billion, down 10%. rebound starting next year, with things like generative synthetic intelligence expected to boost overall IT finish and computer demand. iPhone sales proved a little more resilient, with profits up 3%, given the momentum Apple is seeing in emerging markets such as India, Indonesia and Turkey, with financing plans and recovery systems helping to spur growth. demand. Furthermore, the launch of the iPhone 15 at the end of last quarter could also help Apple to some extent. Although Apple has largely kept prices low across its range, a more favorable sales mix, skewed towards higher-end iPhone Pro models, could simply spur profit expansion. Investors are also likely to be very pleased with the surprising turnaround in the expansion of Apple’s highly lucrative segment. Services sales rose 16% to $22. 3 billion in the fourth quarter, returning to double-digit expansion, after just 5% expansion in the second quarter and 8% in the fiscal third quarter. 23, powered through the App Store, advertising, AppleCare, iCloud, PaymentArray and AppleTV+. Apple says it now has more than 1 billion paid subscriptions on its platforms, with an overall installed base of devices of more than 2 billion. Apple’s gross margins are also at record levels. In the fourth quarter, margins stood at 45. 2%, an increase of 70 foundation issues sequentially. This expansion was due to a favorable product mix (Apple encouraged consumers to opt for the more expensive Pro edition of its products) and also through increased sales of services. Product gross margin was 36. 6%, an increase of 120 foundation issues sequentially, while service gross margin was 70. 9%, an increase of 40 foundation issues year-over-year. Last room.
Overall, AAPL stock has seen incredibly strong gains of 40%, rising from $130 levels in early January 2021 to around $185 now, to a roughly 20% increase for the S.
Despite signs that Apple could see a recovery in demand, we cost Apple about $178 per share, or 4% below market value. We think Apple’s valuation is a bit rich, as the stock is trading at around 28 times 2024 earnings, which is higher relative to old levels. In addition, according to consensus estimates, earnings expansion is also expected to remain in the mid-single digits over the next two years. Check out our Apple valuation research to learn more about what drives our estimate of Apple’s value and how it compares to its peers.
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