Apple (NASDAQ:AAPL) stock is riding high post-earnings, gaining 7% after posting solid results.
It is not easy to become the world’s first $3 trillion company but Apple has done it in the past and it can do it again.
Due to the tech-sell-off and investor sentiment, most stocks were down and so was APPL stock. It went from $182 at the beginning of January and closed the month at $159. It trades today at $174 and looks to have higher to climb.
I had written about buying APPL stock before the results as it will push the stock higher. If you had purchased the stock then, you would already be sitting on gains of 6.25% in a week. However, it is still not too late to own APPL stock. I believe the stock below $200 is a strong buy. Here’s why I think so.
Blow-Out Quarterly Results
The company reported revenue of $123.9 billion and a net profit of $34.6 billion. It is significantly higher compared to the revenue of $111.4 billion in the same quarter a year ago.
This shows that the company has handled the chip shortage and supply chain issues well. Its earnings hit an all-time high as did the revenue from Wearables and Services segments. The company’s iPhone revenue was a whopping $71.6 billion and it beat analyst expectations in all segments except the iPad.
The company also announced a dividend of $.22 per share for the quarter. If you are an investor who enjoys regular dividend income, APPL stock is a great choice.
Despite the pandemic and the supply chain issues, this was the company’s biggest quarter ever. It speaks for the company’s strength and management.
Apple already has an impressive line-up of products and it is constantly innovating and growing. The company ended the quarter with a cash balance of $203 billion and total debt of $123 billion. Apple has a solid business that continues to generate strong cash flow and reward shareholders.
The revenue growth may slow in the coming quarter but it does not say anything about the fundamentals of the company. Apple has a line-up of products and services that are consistently going to generate revenue in the long term. Do not forget the potential of Metaverse and Apple in the coming years.
What Analysts Think of APPL Stock
I strongly believe that AAPL stock will hit the all-time high of $182 soon but analysts are of the opinion that it could go much higher.
A Monness Crespi analyst, Brian White, has a price target of $199 on the stock with a “buy” rating. Katy Huberty, a Morgan Stanley analyst has a price target of $210 with an “overweight” rating on the stock. The analyst considers the stock a top pick for 2022 based on the December quarter and the March guidance.
Further, Daniel Ives, a Wedbush analyst has an “outperform” rating with a $200 price target. Cowen analyst Krish Sankar has a price target of $200 with an “outperform” rating on the shares.
Sidney Ho, a Deutsche Bank analyst has a price target of $210 with a buy rating. The analyst is impressed with the solid quarterly results.
All in all, Apple is a strong company with massive potential to grow. It is a dividend-paying company which makes it even more attractive for investors. I believe AAPL stock has the potential to go beyond $200 in the coming months. Considering the revenue numbers and the potential of the company, the stock looks undervalued.
AAPL stock is still in the buy zone.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
