The Zacks Analyst Blog Highlights Apple, Dell Technologies, HP and Microsoft

For Immediate ReleaseChicago, IL – November 4, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple AAPL, Dell Technologies DELL, HP HPQ and Microsoft MSFT.Here are highlights from Friday’s Analyst Blog:Apple Tops Q4 Earnings and Revenue Estimates: Buy, Sell or Hold?Apple reported fourth-quarter fiscal 2024 adjusted earnings of $1.64 per share, which beat the Zacks Consensus Estimate by 10.07%.GAAP earnings, which include 67 cents related to a one-time income tax charge ($10.2 billion) due to the reversal of the European General Court's State Aid decision, was 97 cents, down 33.6% year over year.AAPL's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.05%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Apple shares were down more than 1.8% in pre-market trading following the fiscal fourth-quarter results. Apple shares have returned 21.2% year to date (YTD), underperforming the Zacks Computer & Technology sector's return of 26.9% and the Zacks Computer – Micro Computers industry's 20.4%.AAPL shares have also lagged its closest peers like Dell Technologies and HP but beat Lenovo. YTD, Dell Technologies and HP shares appreciated 61.6% and 18%, respectively, while Lenovo fell 5.4%.Before diving into AAPL's investment prospects, let's take a glance at its quarterly numbers.Apple's Q4 Top-Line Rides on Strong Services GrowthNet sales increased 6.1% year over year to $94.93 billion and beat the Zacks Consensus Estimate by 0.39%. Unfavorable forex hurt net sales by 230 basis points (bps).Services revenues grew 12% from the year-ago quarter to $24.97 billion and accounted for 26.3% of sales. The figure beat the consensus mark by 0.59%.Apple now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago. Paid subscriptions grew double-digits year over year in the reported quarter.iPhone sales increased 5.5% from the year-ago quarter to $46.22 billion and accounted for 48.7% of total sales. iPhone sales beat the Zacks Consensus Estimate by 0.59%.Overall, product sales (71.8% of sales) climbed 4.1% year over year to $69.96 billion.Apple's China Sales Remains Weak, Europe & Asia JumpsGreater China sales decreased 0.3% year over year, fully offset by strong revenues from the Rest of Asia Pacific and Europe, which increased 16.6% and 11%, respectively.While America's sales inched up 3.9%, Japan's sales increased 7.6%.Mac & iPad Sales Up, Wearables DeclineNon-iPhone revenues (iPad, Mac and Wearables) increased 1.5% year over year on a combined basis.Mac sales of $7.74 billion increased 1.7% from the year-ago quarter and accounted for 8.2% of total sales. The figure beat the Zacks Consensus Estimate by 4.19%.iPad sales of $6.95 billion increased 7.9% year over year and accounted for 7.3% of total sales. The figure beat the Zacks Consensus Estimate by 0.31%.Wearables, Home and Accessories sales decreased 3% year over year to $9.04 billion and accounted for 9.5% of net sales. The figure beat the consensus mark by 4.67%.Apple Expands Gross & Operating Margin Y/YThe gross margin of 46.2% expanded 110 bps on a year-over-year basis. The gross margin contracted 30 bps sequentially due to an unfavorable product mix.Products' gross margin expanded 100 bps sequentially to 36.3% due to a favorable mix. Services' gross margin was 74%, unchanged sequentially.Operating expenses rose 6.2% year over year to $14.29 billion due to a 6.3% increase in research & development expenses and a 6% improvement in selling, general & administrative expenses.Operating margin expanded 100 bps on a year-over-year basis to 31.2%.Apple's Balance Sheet Remains Strong   As of Sept. 29, 2024, cash & marketable securities were $156.65 billion compared with term debt of $106.63 billion.Apple returned nearly $29 billion in the reported quarter through dividend payouts ($3.8 billion) and share repurchases ($25 billion).Apple Q4 Revenues to Grow on Strong Service BusinessApple expects the December quarter's (first-quarter fiscal 2025) revenues to grow low to mid-single digits on a year-over-year basis.For the Services segment, Apple expects a double-digit growth rate similar to fiscal 2024.Gross margin is expected to be 46-47% in the first quarter of fiscal 2025. Operating expenses are expected to be between $15.3 billion and $15.5 billion.AAPL Shares: Buy, Sell or Hold Post Q4 Earnings?AAPL has been on the investors' radar thanks to its AI push with the introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia. Apple Intelligence features are now available in U.S. English for iPhone, iPad, and Mac users.Apple's AI push is expected to bring consumer-focused AI-enabled PCs into the market, thereby aiding PC shipments in the long haul.AAPL has been playing catch-up in the AI space compared with Alphabet, Microsoft and Amazon, its peers in the "Magnificent 7" group.However, we believe the upside in Apple shares is limited in the near term. Apple's next phase of growth is heavily dependent on the success of Apple Intelligence, the benefits of which are already priced in the stock price, in our view.Apple's valuation is stretched at the moment, as suggested by the Value Score of D, which makes the stock risky.In terms of the forward 12-month Price/Earnings ratio, AAPL is trading at 29.77X, higher than the sector's 26.93X.Currently, Apple carries a Zacks Rank #3 (Hold), which implies that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                      https://www.zacks.com                                                   Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report HP Inc. (HPQ): Free Stock Analysis Report Dell Technologies Inc. (DELL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks