iPhone Shipments in China Soar: Are Apple Shares a Buy?

The ‘Magnificent 7’ group has remained in the headlines all over the past year thanks to a few members’ strong quarterly results and positive price action.

Not all group members have experienced the same levels of positivity, specifically Apple AAPL, whose shares have increased just 8% over the last year compared to the broader market’s 28% gain. Uncertainties concerning China sales have bogged down performance.

However, Apple shares have gained nearly 10% over the last month, with shares seeing a positive reaction post-earnings. And just today, Bloomberg reported that shipments of iPhones in China rose 52% last month, helping aid share performance further.

Given the favorable development, let’s take a closer look at how the company currently stacks up.

Apple’s Latest Quarterly Results Please Investors

The technology titan posted a 1.3% beat relative to the Zacks Consensus EPS estimate and posted sales 1% ahead of expectations in its latest release, impressively reflecting its fifth consecutive double-beat.

The company experienced woes in China throughout the period, but overall, sales came in much closer to expectations relative to other periods, missing our consensus estimate by $220 million vs. a $2.5 billion miss in the previous period.

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Image Source: Zacks Investment Research

Notably, the tech titan announced the biggest buyback in corporate history totaling $110 billion. Reflecting further positivity, Apple also unveiled a 4% boost to its quarterly payout, reflecting the 12th consecutive year of higher payouts.

Earnings expectations have modestly increased across the board, reflecting analysts’ optimistic view.

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Image Source: Zacks Investment Research

The company’s earnings growth has slowed but is still expected to remain favorable, with consensus expectations for its current fiscal year suggesting 7% year-over-year growth. Top line growth isn’t expected to be as strong, forecasted to see a modest 0.4% bump year-over-year.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

With shares showing relative strength post-earnings over the last month and favorable news concerning China shipments being announced, Apple AAPL has jumped back into many watchlists.

Although shares haven’t been as strong as those of a few of the other Mag 7 members, the company's solid fundamentals, including its strong cash-generating abilities, make it a worthy selection for many portfolios.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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