Apple (AAPL) outpaces stock market gains: what you need to know

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IIn the last trading session, Apple (AAPL) closed at $131.56, marking a +1.15% move from the previous day. The change outpaced the S&P 500’s 0.22% gain on the day. Meanwhile, the Dow Jones lost 0.13% and the tech-heavy Nasdaq gained 0.22%.

Prior to today’s trading, shares of the maker of iPhones, iPads and other products were down 4.38% in the past month. That was narrower than the IT & Technology sector’s 9.55% loss and the S&P 500’s 10.02% loss during that time.

Investors are hoping for strength from Apple as its next earnings release approaches. The company is expected to post EPS of $1.14, down 12.31% from the prior year quarter. Meanwhile, our latest consensus estimate calls for revenue of $82.36 billion, up 1.13% from the prior year quarter.

Zacks consensus estimates for the full year from AAPL call for earnings of $6.11 per share and revenue of $394.45 billion. These results would represent year-over-year variations of +8.91% and +7.83%, respectively.

It’s also important to note recent changes to analyst estimates for Apple. Recent revisions tend to reflect the latest short-term trading trends. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. To benefit from this, we have developed the Zacks Rank, a proprietary model that takes into account these estimation changes and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system is proven and externally audited for outperformance, with #1 stocks returning an average of +25 % per year since 1988. The Zacks Consensus EPS estimate fell 0.1% over the past month. Apple currently sports a Zacks ranking of #3 (Hold).

Valuation is also important, so investors should note that Apple currently has a Forward P/E ratio of 21.55. Its industry sports an average Forward P/E of 7.78, so we could conclude that Apple is trading at a premium comparatively.

We can also see that AAPL currently has a PEG ratio of 1.72. The PEG ratio is similar to the widely used P/E ratio, but this measure also takes into account the company’s expected earnings growth rate. The AAPL industry had an average PEG ratio of 1.84 at yesterday’s close.

The Computing – Minicomputers industry is part of the Computing and Technology sector. This group has a Zacks Industry Rank of 228, which places it in the bottom 10% of all 250+ industries.

The Zacks Industry Rankings are ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these industries. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

To follow AAPL in upcoming trading sessions, be sure to use Zacks.com.

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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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