Trading Signals - Apple (AAPL)
Aries Yuangga, Wakil Penasihat Berjangka
Apple's Q1 FY24 Earnings Analysis: Vision Pro Launch and Services Drive Growth
Summary
Apple Inc. (NASDAQ: AAPL) recently unveiled its Q1 FY24 financial results, showcasing a notable 11.3% increase in service revenue, which now accounts for 19.3% of its total revenue. The introduction of Apple Vision Pro is a pivotal development for Apple's ecosystem, with significant investments from leading corporations. Despite projecting flat revenue growth for Q2 FY24, Apple anticipates sustained double-digit growth in service revenue, with iPhone sales expected to align with the previous year's figures.
Based on the chart provided for Apple Inc. and the trading setup parameters:
Technical Analysis
Uptrend Line: The chart shows Apple Inc. in a strong uptrend, indicated by the ascending trendline. This line has been acting as dynamic support for the price action over an extended period.
Potential Correction: There is a potential for a price correction to the Fibonacci retracement levels at .5, .382, and .236, which correspond to the price levels of approximately $182, $178.70, and $173.73, respectively.
Fibonacci Retracement Levels: These levels are often where traders look for potential buying opportunities in a healthy uptrend, anticipating a bounce back toward the uptrend.
Trading Setup
Buy Area: Around the trendline and Fibonacci retracement levels, between $173.73 and $182.
Stop Loss: Around $163, which is below the .236 Fibonacci level and recent swing lows.
Targets: $220, $235, and $254.
Potential Loss: The potential loss from the average buy area price would be approximately 8.36% if the stop loss is triggered.
Potential Gains:
To the first target at $220: The potential gain is approximately 23.69%.
To the second target at $235: The potential gain is approximately 32.12%.
To the third target at $254: The potential gain is approximately 42.80%.
These potential gains suggest a favorable risk-reward ratio for the setup. Traders should still manage their risk according to their trading plan and consider the size of their position to ensure it aligns with their risk management strategy. The provided analysis does not constitute financial advice.
Financial Highlights and Strategic Developments
Apple's Q1 FY24 performance was marked by a 2.1% rise in revenue and a significant 16% increase in EPS, highlighting notable margin improvements. The service sector's revenue soared by 11.3%, reaching a new peak and contributing significantly to the overall revenue mix. This growth underscores the service sector's role in reducing the company's business cyclicality.
The quarter saw Apple achieving a record 2.2 billion active devices, underpinning future service sector growth. The company reported substantial growth in paid subscriptions, emphasizing its focus on advertising, cloud services, payment services, video, Apple Store, and AppleCare to leverage its vast device ecosystem.
Apple's robust financial position is evident in its $173 billion cash reserve and a net cash position of $65 billion. The company's shareholder-friendly capital allocation was demonstrated through nearly $27 billion returned via dividends and buybacks.
The Apple Vision Pro, priced at $3,499, is set to revolutionize Apple's ecosystem, supported by over 600 tailored apps and games. Major corporations are already integrating Vision Pro to enhance customer and employee experiences. This product is expected to open new revenue streams from both hardware sales and platform-related services.
FY24 Outlook and Market Potential
For Q2 FY24, Apple forecasts flat revenue growth year-over-year, attributing this to a challenging comparison with Q2 FY23's pent-up iPhone demand. However, the company remains optimistic about its service revenue and iPhone sales.
The expansion plans, including nearly 10,000 new restaurants and a significant increase in the loyalty program's active users, highlight McDonald's growth strategy. The introduction of CosMc's chain and the focus on delivery, drive-through, and mobile orders are poised to further drive growth. However, the impact of inflation on consumer behavior, especially in the domestic market, remains a concern.
Valuation and Investment Thesis
Incorporating Apple Vision Pro's expected sales and the continued growth of Apple's service business into our valuation model, we estimate a fair value of $250 per share. Apple's forward free cash flow multiple suggests a reasonable valuation for a leading technology company with robust growth prospects.
Risks and Considerations
Apple's operations in China, representing a significant portion of its revenue, face challenges from local competitors and geopolitical tensions. The performance in the Great China region and the competitive landscape, particularly with Huawei's resurgence, are critical factors to monitor.
Conclusion
Apple's Q1 FY24 results and strategic initiatives, particularly in the service sector and the launch of Apple Vision Pro, reinforce our positive outlook on the company. With a 'Buy' rating and a fair value estimate of $250 per share, we remain bullish on Apple's growth trajectory and its ability to navigate market challenges.
*Disclaimer:
This analysis is based on historical price movements and technical indicators. Investors are advised to conduct their own research and consult with financial advisors. The stock market is inherently volatile, and past performance does not guarantee future results. This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.
