Apple Investor Presentation
Key Performance Indicators for the Apple Company
Apple Company is an international corporation that was founded in 1976. The organization designs, develops, and sells personal computers, computer software, and consumer electronics. Its ticker symbol is AAPL. Apple Inc is the third largest organization in terms of the production of mobile phones. Also, with respect to revenue, the organization is ranked as the second-largest company. The achievements of Apple Corporation is attributed to its positive relation between stakeholders and its successful operations. The Apple Organization uses key performance indicators to control its quality in the market. A key performance indicator is a term used by different companies to evaluate performance.
Besides, the Apple Company has experienced a continuous increase in its operations over the past few years. Consequently, cash flows from operating activities have increased significantly. In 2021, the Apple Company has experienced a growth of 39.5% from that of 2020. The cash flow from operation in 2021 for the quarter ending 30th June was 83.838 billion dollars. The Apple Company’s cash flow from operation for the year 2020 was 80.674 billion dollars (Sonkiya, Bajpai, & Bansal, 2021). That showed a growth of 16.26% from that of 2019. The company’s cash flows from operations show a drastic growth and stability of the Apple organization. It portrays a great trend, thus, giving higher expectations for the company’s cash flow from operations.
Furthermore, the Apple Company had a price to earnings (PE) ratio of 27.69 as of October 2021. The company is a good PE ratio because it is selling at an attractive price. The PE ratio is estimated by dividing the latest closing price by the earning per share number. The price to earnings ratio is a way of determining whether the stock is under or overvalued. It is the most used measure of valuation. In July 2021, Apple was paying 0.22 dollars per share quarterly dividend, giving its stocks a dividend yield of 0.6%. Also, the organization has experienced significant growth in its earnings per share over the past few years. By 2021, the company had a 5.23 dollars earnings per share, over a 52.92% increase from 2020 (Sonkiya, Bajpai, & Bansal, 2021). It had a 3.28 dollars annual EPS in 2020, a 10.44 per cent increase from that of 2019. However, the annual EPS for 2019 declined, but still, it was at a high mark showing the growth rate of the company over the years.
Additionally, the revenues of the Apple Company are increasing every year. Thus, in the next 12 months, revenues are estimated to be approximately 447.155 billion dollars. The company’s revenue for 2021 was 347.155 billion dollars, a 26.77% increase from that of 2020. It recorded annual revenue of 274.515 billion dollars, a 5.5% increase from that of 2019. In 2019, it recorded a revenue of 260.174 billion dollars, a 2.04% decrease from 2018. Also, the company registered an average trade volume of 10.98 billion dollars. The organization’s current stock price goes at 142.72. The stock price is expected to rise in the next one year. Fifty-two weeks high is 143.29. In the next 1 year, the stock price is expected to rise to 145.02. According to analysts providing 1 year price targets for Apple Company in the past three months. The mean price target is estimated to be 169.86 dollars, a low estimate of 240 dollars, and a high estimate of $198 (Sonkiya, Bajpai, & Bansal, 2021). Currently, the Apple Company has a market cap of $2.36 trillion. In 2020, it was the first company to reach a 2 trillion market cap. Therefore, the key performance indicators of the Apple Company shows that the organization is growing at a significant rate.
Relationship between the Stock Price and Price-to-Earnings Ratio
The stock price can be described as the recent price the stock share is trading on the market. On the other hand, the price-to-earnings ratio is referred to as the ratio that values an organization that determines its existing share price in relation to its EPS. Whereas the stock price of a company shows the value placed in that investment by the investors. The price to earnings ratios reflects the worth of the stock based on the future or current profits. Apple’s stock is fairly valued as it has a price to earnings ratio that justifies its price. Nonetheless, many stocks of different organizations are either overvalued or undervalued in relation to earnings (Ghaeli, 2017). Undervaluing or overvaluing stocks creates chances for investors to sell shareholdings at premium prices or buy them at a bargain. The correlation between the earnings of a company and its stocks can sometimes be complicated. High returns do not portray a high stock price. On the other hand, huge losses do not reflect a low stock price. It is hard for organizations to stay in business for long without earning. Therefore, two primary factors affecting stock price are a promise of future earnings and current earnings.
Market Capitalization
Market capitalization is the total dollar market value of an organization’s outstanding share of stocks. It is also referred to as a market cap. Market capitalization is estimated by multiplying the total number of an organization’s outstanding shares by the existing price of one share. Market capitalization is an easy and quick method of determining the value of a company by deducing what the market feels it is worth for the publicly traded organization (Brealey, Myers, & Marcus, 2020). It is one measurement used by investors to estimate the company’s value in the stock market. Many investors assume that the value of a single company is apparent in their price per share. For instance, organization A has 1 million outstanding shares and are selling at 100 dollars per share. The market capitalization of this company is 100 million dollars. An organization B has 10 million outstanding shares, and it is selling them at 80 dollars per share. The market cap of the company is 800 million dollars. Even though the stock of organization A costs more per share, company B is much larger.
Trends in Stock Price, Dividend Payout, and Total Stockholders’ Equity
The stakeholder’s equity of a company decreases when it pays cash dividends to the shareholders. It declines by the total value of all the dividends paid to stakeholders. Nonetheless, the impact of dividends changes based on the dividend type paid by the company. Cash dividends and stock dividends have different impacts on stakeholder equity (Ahmar, 2016). Dividends are always paid in the additional share of stocks, cash, or a combination of the two. Shareholders will be paid a specific dollar amount according to the total number of shares owned by the company when a dividend is paid in cash. An organization that declares a 1 dollar dividend, thus, pays 1000 dollars to a shareholder owning 1000 shares.
References
Ahmar, A. (2016). Predicting Movement of Stock of Apple Inc. Using Sutte Indicator. Proceedings The 3rd AISTSSE Trends in Science and Science Education.
Brealey, R. A., Myers, S. C., & Marcus, A. J. (2020). Fundamentals of corporate finance/por (No. POS 658.15 B7.).
Ghaeli, M. (2017). Price-to-earnings ratio: A state-of-art review. Accounting, 3(2), 131-136.
Sonkiya, P., Bajpai, V., & Bansal, A. (2021). Stock price prediction using BERT and GAN. arXiv preprint arXiv:2107.09055.
