Disclaimer - Nothing in this post is financial advise
Apple(Ticker: AAPL) is down 20,38% since its 52 week high in December 2021.
But does this mean Apple stock is already a cheap buy or is still too expensive?
Is Apple stock a buy?
Looking back at the 1st half of 2022, we can say that the tech bubble has finally burst with the NASDAQ(Ticker: QQQ) down 30% year to date.
Many tech-related stocks like Apple have been hammered in the first half of the year, but looking at the valuation of Apple, one could argue that shares are still a bit expensive.
A PE/Ratio of 23.68 and PEG Ratio of 2.42 is quite expensive compared to rivals Microsoft Corporation(PEG Ratio of 1.75), Samsung Electronics(PEG Ratio of 0.89), or META Platforms, Inc.(PEG Ratio of 0.98).
Does growth justify the price?
Apple managed to grow its year-over-year revenue from $274,515,000 in 2020 to $365,817,000 in 2021, which is an impressive increase of 33.26%. But looking back last 3 years, we can see that revenue growth was slowing down massively. With an increase of only 3% between 2018(total revenue $265,595,000) and 2020(total revenue of $274,515,000) according to yahoo finance.
Apple - The market leader
Since it first released its iPhone in 2007, Apple was on a path to becoming the leader in the smartphone market.
Fast forward to 2022, Apple, jointly with Samsung, is the market leader in smartphones swapping pole positions several times in the last years.
While competition in the smartphone market is harsh, the iPad continues to dominate the tablet market with a market share of 34.2%. Taking 1st place in front of Samsung, which only has an 18.3% market share.
Mac shipments keep growing
In 2021 Mac shipments grew twice as fast as the overall PC shipments, with Mac growing 28,3%, compared to the global PC market which only grew 14,6% in the same period.
These results were strongly driven by sales of the M1 Pro and M1 Max. With the new M2 processor in Apple's MacBook Air, Apple could continue to outpace its competition in the coming years.
Is Apple stock a buy?
While the valuation of Apple is still pretty high compared to its competitors, you shouldn't underestimate the power of Apple's branding and its loyal consumer base that keeps growing year over year.
Apple could plunge more, but on the other side hasn't been this cheap in recent months. Are you buying now?
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