Neil Cybart 12/3/24 Neil Cybart 12/3/24

AAPL Hits All-Time High, AAPL Valuation Metrics, Observations on Big Tech Valuation

We begin today’s update with my thoughts on AAPL shares hitting all-time highs. The discussion will then turn to an examination of AAPL valuation metrics (forward P/E, EV/FCF, and free cash flow yield). In addition to looking at Apple’s valuation metrics, there is value found in taking a broader look at how Big Tech is trading from a valuation perspective. We will keep our focus to free cash flow / enterprise value. While there may not be one gold standard valuation metric that all market participants prioritize, free cash flow remains my go-to metric. The data removes much of the noise that is found with income statement line items.

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Neil Cybart 8/27/24 Neil Cybart 8/27/24

Microsoft 2Q24 Earnings, Ranking Big Tech’s 2Q24 Performance

For today’s update, we will examine Microsoft’s CY2Q24 earnings. This will wrap up our Big Tech 2Q24 earnings reviews. We will then recap Big Tech earnings season by ranking the companies from best to worst reports.

While there are 2Q24 earnings from a few additional companies worth checking out, we will do that after going over several Apple news items.

Just a few hours ago, Apple announced that CFO Luca Maestri will be stepping down as CFO on January 1st, 2025. He will be remaining at Apple to lead Apple’s IT, information security, and real estate portfolios. Kevan Parekh, who has been at Apple for 11 years and is currently VP - Financial Planning and Analysis, will become Apple's new CFO. There is more to say about this in the next update.

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Neil Cybart 8/7/23 Neil Cybart 8/7/23

Apple's 3Q23 in Three Charts

Hello everyone. Welcome to Monday and a new week. We will continue our Apple 3Q23 review.

Given how the past few quarters for Apple have contained similar themes, we are going to try something different for this quarter's review. We will focus on three charts that sum up Apple's 3Q23. As we will see, there is quite a bit of consistency on display with each chart. (We will cover all of the granular takeaways from Apple's 3Q23 earnings call in tomorrow’s update.)

Before jumping into today’s update, one clarification regarding Friday’s update. When talking about Apple’s hardware margins, the commentary was garbled. That part of the update should have read:

Products (HW) gross margin: 35.4% (vs. my 35.7%). My iPhone gross margin estimate was a tad bit too optimistic. On a year-over-year basis, HW gross margins were up by 85 basis points.

Apple's 3Q23 in Three Charts

Gross Profit Resiliency

3Q23 results: $36B gross profit (up 1.5% from 3Q22)

There has been much attention placed on Apple’s gross margins (and rightly so). Gross margin is cost of goods subtracted from revenue. Based on management commentary, the company will come close to reporting a 11-year quarterly high for gross margin percentage 1Q24. Management provided a 44.0% to 45.0% range. Gross margin percentages don’t tell the full story though. Instead, we need to look at gross profit in absolute terms to obtain a cleaner assessment of Apple’s business.

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Neil Cybart 12/27/19 Neil Cybart 12/27/19

Above Avalon Podcast Episode 161: Apple's Spectacular Year on Wall Street

Something has clearly changed when it comes to the way Wall Street is treating AAPL. For the first time with Tim Cook as CEO, Apple shares are trading at a premium to the overall market. In episode 161, Neil discusses how changing behavior as it relates to passive versus active investing may be creating a type of perfect storm for AAPL shares. Additional discussion topics include Apple’s valuation, free cash flow, momentum shifting to passive investing, and Warren Buffett.

To listen to episode 161, go here.

The complete Above Avalon podcast episode archive is available here.