The current quarterly reporting season shows one thing very clearly: there are some losers in the well-known and endangered sectors of the corona virus. However, there are also many strong companies that just continue as if nothing had happened.
Apple (WKN: 865985) is one of the winners. The quarterly figures that the cult group from Cupertino has now presented have even exceeded the market expectations relatively significantly. This in turn led to a positive price increase of 6.6% in an initial, relatively quick reaction.
But is that still justified? Or maybe an exaggeration? An exciting question, which we want to get to the bottom of in the following. Small hint: Thanks to this performance according to the figures, the value of the cult group from Cupertino has increased by at least another 109 billion US dollars.
numbers, data, facts
There may well be reasons why investors have been so surprised by the solid quarterly results. The divergent third quarter of the current fiscal year, which ended in June, ended with sales of $ 59.7 billion. That wasn’t just an 11% increase. No, but also a significantly higher value than analysts had expected in advance.
Conversely, earnings per share were $ 2.58, which also hit expectations. It is also noteworthy that sales of iPhones and other hardware increased significantly. CEO Tim Cook spoke of significant double-digit growth in both areas: the products and the services.
An overall bombastic quarter in a challenging time. However, and investors should also consider this: the trend towards more home offices could have spurred growth in the short term. Many a company or authority may have spent more money on hardware lately. That could have been a growth driver.
$ 109 billion more market value
Finally, I would like to give you the following consideration: As I said, the Apple share jumped by around 6.6% in a first reaction. Measured against a previous market value of $ 1.66 trillion, this means that the cult company from Cupertino has added about $ 109 billion in market value. Simply due to a positive quarter in which sales and results turned out slightly better than investors had expected. Is that justified? Or sustainable?
In any case, one thing is certain: Apple’s new market value should approach the $ 1.8 trillion mark accordingly. Meanwhile, Apple is still rated based on the 2019 figures with a price-earnings ratio of over 30, which could also be ambitious. No question: Apple now seems to be back on the road to success, and if double-digit growth can be maintained, there is a chance that the cult company will grow into its valuation measure.
However, investors should now ask themselves one question: Given the size, how likely is it that long-term double-digit earnings growth can be achieved?
Just think about the numbers!
$ 1.8 billion in market value and $ 109 billion in market capitalization added on a quarterly basis. Is that justified? I definitely don’t want to rate that and keep it relatively open at this point. However, it may be appropriate to think about these numbers and the overall quarterly figures. And to put them in relation to other market values and valuations.
The post Apple’s market cap rises by $ 109 billion: just because of solid quarterly numbers! appeared first on The Motley Fool Germany.
Vincent does not own any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple stocks.
Motley Fool Deutschland 2020