Apple Plc Stock Analysis

Apple Plc Stock Analysis

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Executive Summary

The following report looks at the analysis of the Apple Company, which is the leading Smartphone and computers developer in the world. The analysis reveals that the share price of the company has grown by more than 1000% since it was listed. However, the narrow focus on the company reveals that its share price is dropping, its revenue growth is reducing, and its market share is reduction slightly. The analysis reveals that it would be recommendable to take a sell option on the company as the indication points pout to the future downward trend in the value of the company’s share.

1. Company Background

Apple Inc. was founded in 1976 by Steve Jobs as computer selling and developing company. The company was incorporated in 1977. Apple Inc. Deals with designing, developing and selling computer software, consumer electronics, and offering online services. The company forms a component of the Dow Jones Industrial Average, and it targets worldwide market with operations in 16 countries with 453 stores in this countries. Apple has four subsidiaries that include Anobit, FileMaker, and Betas Electronics. The ensuing segment presents the evaluation of the Apple Company with a view to issuing a buy, hold or sell recommendation of the company’s stock (Malone et al., 2008).

2. Company Analysis

The following analysis looks at the financial, share price valuation and historical costs, dividend policy, financial risk, company’s projects and governance issues of the Apple Company.

2.1. Financial Analysis

1. Profitability

Figure 1.0 below shows the performance and profitability of the Apple Company. The revenue of the company grew spontaneously from $19, 315 million in 2006 to $233,715 in 2015 representing an 1110% revenue in a period of 12 years, with gross margin increasing from 29% to 40.1%. This shows that the market for the company is expanding, and the company is adopting cost-effective methods of production. Net Income of the company grew from $1, 989 million to $53,731 from 2006 to 2015. This shows the company’s continued dominance in the technological industry.

Figure 1.0 Apple Profitability

The total asset turnover of the company increased from 13.83% in 2006 to 19.36% in 2015. This shows that the company’s ability to generate money from every dollar invested in assets increased from $0.14 to $0.19 per dollar invested in assets. This is attributed to high assets growth in revenue. The return on capital increased from 19.61% to 29.64% and the returns on Equity increased from 22.8% to 42.71%. This indicates that the company has improved its efficient utilization of the resources invested by the shareholders. This is illustrated in figure 2.0 below:

Figure 2.0 Apple Company Profitability Analysis (Bloomberg Business, 2015)

1. Financial Projection And Growth Prospects

The Apple company revenue has growth on average declined from 2011. In 2006, the revenue of the company grew by 38.65% the growth increased to the year 20111 when the company registered 65.96% revenue growth. However, the revenue growth declined to 6.95% in 2014 before the company regained its market confidence and gained 27.86% market growth. The decline in growth of the company’s revenue can be attributed to the increase in the level of completion with Company’s such as Samsung, Techno, and Sony expanding………………..