AAPL is a Value Creating Machine
Past performance is not an indicator of future results
It's been almost 2 weeks since Apple (AAPL) released its Q4 earnings (we note that AAPL's financial year-end is 29 September). The market was disappointed with the revenue number, which fell short of consensus. CEO Tim Cook attributed this to larger-than-expected supply constraints. Since then, the stock has traded sideways (blue rectangle).
However, AAPL is fundamentally a very strong company. Its ROIC (based on NOPAT, PP&E, and net working capital) shows a company that is a seemingly value creating machine. Of course cost of capital will be a factor, but even assuming a high rate of 15%, the spread is awe-inspiring. It is also worth mentioning that its PE ratio is 26.88 vs a market ratio of 35.93 (NASDAQ 100). Markets are looking frothy, but given AAPL's astounding metrics, a pullback will be compelling.
References:
https://finance.yahoo.com/quote/AAPL%3B?p=AAPL%3B
https://www.apple.com/za/newsroom/2017/11/apple-reports-fourth-quarter-results/
https://www.wsj.com/market-data/stocks/peyields
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.