Analysts are debating whether or not this is the right time to buy AAPL after the stock fell a further 4.78% yesterday.
AAPL officially entered a bear market this week, the stock down more than 20% since its October 3 high. Yesterday’s fall means that the stock has lost almost a quarter of its value in less than two months …
The stock closed yesterday at 176.98.
Analysts and investors are divided on the company’s future. Business Insider reports that this is the ‘white-knuckle period,’ when existing investors will be worrying whether or not they made the right call, and potential investors will be wondering whether now is the time to buy AAPL or stay well away.
There are two areas of disagreement. First, iPhone prices. Some hold the view that Apple has demonstrated a consistent ability to keep pushing up its prices, with consequent benefit to its average selling price. They argue that the company hasn’t yet hit a limit, so can continue this strategy for some time to come.
Others worry that Apple has already pushed prices as high as they can go, and that the company implicitly admits it has hit ‘peak iPhone‘ – so it’s downhill from here.
Second, there is debate about the extent to which growing Services revenue will make up the shortfall. The bulls argue that active devices are still growing, which means ever more Services customers. This, they suggest, is exactly the right time to buy AAPL.
The bears aren’t convinced.
In addition, Services revenue (apps, music, and so on) was up 17% year-on-year in Apple’s Q3 earnings this year. As Apple’s existing “installed base” of iPhones continues to grow — it will hit 1 billion phones by the end of the year
Some argue that this is a classic opportunity for ‘buying on the dip’ – buy AAPL when the price is low and cash in when the stock recovers, or take the chance to bolster a long-term holding. Others think the slide will continue.
Seeking Alpha yesterday put the bull case – albeit before the stock fell a further 4%. Which side do you fall on? Share your views in the comments.
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