Today is Wednesday, May 13, 2020, and we’re looking at the recent performance of Apple stock (NASDAQ: AAPL). What caused its price movements over the last month? What do its prospects look like? Let’s find out…
About Apple
Apple is an American consumer electronics company based in California and known for its smartphones (the iPhone) and computers (the Mac), among other devices. It currently has a market capitalization of $1.341 trillion.
Apple’s Price Movements
Apple shares rose 20.14% in the last month because the company’s Q2 earnings and revenue numbers showed growth and beat Wall Street expectations, even in the midst of the COVID-19 pandemic.
With these recent price movements in mind, let’s see how expensive Apple is relative to its peers.
Apple’s Valuation Today
The company’s price-to-earnings (P/E) ratio of 24.27 is 17.25% higher than its industry average of 20.7. That’s not good.
A company’s P/E ratio shows its price as a multiple of its earnings per share (EPS). A relatively low P/E ratio is generally an indicator that a company is undervalued, while a relatively high P/E ratio is generally an indicator that a company is overvalued.
But valuation metrics like P/E are never static for long. They’re especially affected by earnings reports…
Apple’s Near-Future Prospects
Apple’s next quarterly earnings report is expected on Thursday, July 30, 2020. It’s worth watching what that next quarterly earnings report will do to the company’s price and valuation.
The Takeaway
In summary, recent events have pushed Apple shares up in the last month. They’re now overvalued relative to peer companies on a P/E basis, but that could change when the company releases earnings in July.
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