Apple’s stock has shown a 1-month price performance record of -6.47%. Despite the decline in price, I still believe strongly in AAPL.

Apple sells tablets, phones, computers and TV boxes worth $2.36 Trillion. Apple Music and the Apple TV subscription service are also operated by it.

This company’s stock is trading at a 9.29% discount to its 52-week high of $157.26. (See AAPL’s stock charts on TipRanks) 

The Promise of New Products

Apple still receives the majority of its revenues from iPhone sales. As of June 2021, the iPhone generated almost half of Apple’s $81.4 billion quarterly revenue. The iPhone 13’s launch late last month should boost succeeding quarterly revenue to above $86 billion.

This iPhone 13 mini, priced at $699 is a reasonable price and could be a great alternative to high-end Android smartphones. Apple’s 3% share in India, and other emerging markets could be helped by the mini version.

The new iPad Mini 2021 product will fortify Apple’s Number 1 status in tablets. It should prove to be popular, as this product’s 8.3-inch display makes it more comfortable to use as a mobile gaming/watching device.

The iPad Mini 2021 is a realistic option to help Apple sell around 14 million iPads each quarter.

Advertising Revenue

Apple investors have more good news: AAPL’s investment quality has a hidden tailwind known as advertising. Google (NASDAQ 🙂 paid Apple $15 billion in 2015 to continue its search engine being the default choice on iOS devices.

Last year, Apple received only $12 billion from Google to keep that company’s search engine as the default. That means the double-digit growth rate of Google’s annual search engine payments can boost Apple’s rising TTM net income of $86.8 billion.

The other advertising income is from Apple’s Search Ads on the iOS platform. App publishers, who want to attract more users and in-app spenders, can pay Apple to have their apps promoted through Apple’s Search Ads platform.

Cheaper Valuation Ratios

The recent dip in Apple’s stock price gives it forward P/E valuation of just 25.56x.  This is lower than Microsoft’s (MSFT) 33.04x. Given that Microsoft (NASDAQ.) does not have a smartphone hardware business, this undervaluation is unjust. Microsoft does not also have an iOS App Store.

Moreover, Apple’s Piotroski F score is 7, denoting that it is strong financially and presents good investment value. Apple’s total cash position is $61.70 million. It is more than the $8 billion short-term debt.

Apple has a net operating cashflow of $104.41 billion. This means that Apple is very unlikely to stop paying its dividend payments.

Wall Street’s Take 

The consensus among Wall Street analysts is that AAPL is a Strong Buy, based on 19 Buys and 6 Holds. The average Apple price target is $169.64, implying 18.92% upside potential.

Conclusion 

Apple is a leader in tablet and smartphone technology, making it attractive for investors.

The new iPhone 13 series of smartphones will likely protect Apple’s unsurpassed status as the world’s most profitable company.

Disclosure: Motek Moyen didn’t hold any positions in the securities listed in this article at the time it was published.

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