Apple Stock Forecast After Q3 Earnings

Apple Stock Forecast After Q3 Earnings

Summary

  • Apple released its third quarter fiscal earnings on Tuesday, July 26th
  • What analysts expected
  • Apple’s Q3 Earnings Report Summed Up
  • I Know First is bullish on AAPL

Q3 Earnings

Analyst Expectations

A Reuter’s survey concluded with an expectation that Apple’s Q3 earnings per share to be at $1.39 for Q3, a marked decrease from the $1.85 from 2015’s Q3 reports. With the release of their Q2 reports, Apple projected revenue for Q3 to be in between 41 and 43 billion dollars, while analysts believe that it will be $42.1 billion.

iPhone sales make up 2/3 of Apple’s revenue stream. During the quarter ending in March 2016, iPhone sales were down for the first time since the iPhone’s introduction in 2007. Despite the introduction of the iPhone SE, analysts expected iPhone sales to decrease by 16% to 40 million iPhones. Additionally, because of the lower selling price of the SE than other iPhone models, the decrease would impact revenue.

A sector of Apple’s business that CEO Tim Cook deems underappreciated is its services, meaning iTunes, the App Store, Apple Music, etc. In the March reports, Apple disclosed that sales from these platforms had increased by 20%, despite the decline in iPhone sales. An analyst at Piper Jaffray, Gene Munster, predicted that the company brought in $5.9 million in services this quarter, 18% more than last year.

Q3 Earnings in Reality

  • EPS: $1.42
  • Revenue: $42.4 billion
    • Revenue from Services: Increased by 19% year-over-year
  • Net income: $7.8 billion

What did I Know First Project?

In “Apple Stock Before Earnings: Will the Slump Continue?”, an I Know First analyst dissected the expectations for Apple’s third quarter earnings report, which was to be released at markets’ closing on July 26. Many analysts predicted low earnings and recommended Apple as a sell because of the less than stellar predictions for the earning report.

However, our algorithm did not recommend AAPL as a sell. On July 24, our algorithm predicted growth from Apple’s stock for the 3-day, 7-day and 14-day periods. After the earnings report was released, Apple’s stock showed impressive gains, increasing in price by 6.50% the following day.

Apple Q3 Earnings

 

Conclusion

I Know First has made many accurate predictions about AAPL’s stock price correctly in the past. For example, on June 27th, the I Know First algorithm gave a bullish signal of 22.54 for AAPL with a predictability ratio of 0.21 in this 1-month forecast. On July 27th, Apple grew by 10.31% exemplifying the accuracy I Know First’s algorithm. The world is once again looking to Apple to see where it is heading for Q4, but if past experience is any indicator, AAPL will experience continued growth and Apple will shock the world with its revolutionary innovations.

Q3 Earnings

 


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