Why the AAPL Weekly
Options Trade was Executed?
Apple Inc. (NASDAQ:AAPL) is
confirmed to report earnings on Thursday, May 4, 2023 at approximately 4:30 PM
ET. The consensus earnings estimate is $1.44 per share on revenue of $92.94
billion, a decline of 4.5% year-over-year, but the Whisper number is a bit
higher at $1.47 per share.
Investors are bullish going into the company's earnings release
expecting a beat.
Short interest has decreased by 5.6% and overall earnings estimates have
been revised higher since the company's last earnings release.
date, Apple stock is up 30.6%. That compares with an 8.6% rise for the S&P
The AAPL Weekly Options Trade Explained.....
Obviously the results will vary from trader to trader
depending on entry cost and exit price that was undertaken.
** OPTION TRADE: Buy AAPL
MAY 12 2023 170.000 CALLS - price at last close was $3.81 - adjust accordingly.
Entered the AAPL Weekly Options (CALL) Trade on Monday, May 01, 2023, at 9:35, for $3.55.
Sold half the AAPL weekly options contracts on Wednesday, May 03, 2023 for $4.45; a potential profit of 25%.
Sold the remaining AAPL weekly options contracts on Friday, May 05,
2023 for $5.20; a potential profit of 46%.
Some members may still be holding AAPL weekly options
contracts; therefore, we are looking for the APPL stock to continue moving
upwards next week.
Don’t miss out on further trades – become a member today!
The Actual Earnings Report…..
Apple reported earnings of $1.52 per share on revenue
of $94.84 billion for the fiscal second quarter ended March 2023. The consensus
earnings estimate was $1.44 per share on revenue of $92.94 billion. The Whisper
number was $1.47 per share. The company beat expectations by 3.40% while
revenue fell 2.51% compared to the same quarter a year ago.
The company said during its conference call it expects
third quarter revenue to decline similarly to its second quarter decline, or revenue
of approximately $80.88 billion. With gross margins of 44.0% to 44.5%, this
calculates to earnings of $1.14 to $1.17 per share. The current consensus
earnings estimate is $1.21 per share on revenue of $84.71 billion for the
quarter ending June 30, 2023.
“We are pleased to report an all-time record in
Services and a March quarter record for iPhone despite the challenging
macroeconomic environment, and to have our installed base of active devices
reach an all-time high,” said Tim Cook, Apple’s CEO. “We
continue to invest for the long term and lead with our values, including making
major progress toward building carbon neutral products and supply chains by
designs, manufactures, and markets smartphones, personal computers, tablets,
wearables, and accessories worldwide.
sells various related services. In addition, the company offers iPhone, a line
of smartphones; Mac, a line of personal computers; iPad, a line of
multi-purpose tablets; AirPods Max, an over-ear wireless headphone; and
wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch,
Beats products, HomePod, and iPod touch.
provides AppleCare support services; cloud services store services; and
operates various platforms, including the App Store that allow customers to
discover and download applications and digital content, such as books, music,
video, games, and podcasts.
the company offers various services, such as Apple Arcade, a game subscription
service; Apple Music, which offers users a curated listening experience with
on-demand radio stations; Apple News+, a subscription news and magazine
service; Apple TV+, which offers exclusive original content; Apple Card, a
co-branded credit card; and Apple Pay, a cashless payment service, as well as
licenses its intellectual property.
serves consumers, and small and mid-sized businesses; and the education,
enterprise, and government markets. It distributes third-party applications for
its products through the App Store. The company also sells its products through
its retail and online stores, and direct sales force; and third-party cellular
network carriers, wholesalers, retailers, and resellers.
was incorporated in 1977 and is headquartered in Cupertino, California.
The Actual Recommendation.....
Apple has a
market capitalization of $2.6
trillion, and has long been known for its dominance of the smartphone market, a
space in which it accounts for more than 24% of all sales globally. In the
first quarter of the company's fiscal 2022, $66 billion of Apple's $117 billion
total net sales were derived from iPhone sales.
of these hardware products remain Apple's bread and butter, another segment is
quickly catching up. The company's services segment, which is comprised largely
of subscription-based offerings like Apple Music, is growing rapidly. This
recurring revenue business contributed $21 billion of Apple's total net sales
in the first-quarter period, more than sales from its Mac, iPad, or
reported revenues of $117.15 billion in the last reported quarter, representing
a year-over-year change of -5.5%. EPS of $1.88 for the same period compares
with $2.10 a year ago.
the Consensus Estimate of $121.21 billion, the reported revenues
represent a surprise of -3.34%. The EPS surprise was -2.59%.
last four quarters, Apple surpassed consensus EPS estimates three times. The
company topped consensus revenue estimates three times over this period.
The iPhone represented 56% of total company revenue in the latest fiscal
quarter (Q1 2023 ended Dec. 31). And it's the gateway product that brings
"We're proud to now have over 2 billion active devices in our
installed base," CFO Luca Maestri said on the Q1 2023 earnings call. This
massive installed base has doubled over the past seven years, a remarkable feat
that exemplifies Apple's ubiquity. While the majority of these devices are
iPhones, it's worth noting the success of Apple's other products.
beautiful hardware products, Apple's services segment is becoming a more
important part of the business that drives customer loyalty and stickiness. In
the latest fiscal quarter, services accounted for 18% of total sales, a
percentage that has increased steadily over time. This segment carries a gross
margin of over 70%, much higher than the products group, so investors can
expect Apple's profitability to rise in the years ahead.
Also, Apple's ongoing foray into financial services has been impressive,
with Apple Pay, Apple Card, and now a high-yield savings account added to the
mix. The business attracts a more affluent customer base, so these offerings
are poised to do well in the long run, providing Apple with another key revenue
is also looking to the future as it seeks to build out its competitive
advantage in other lucrative markets, including the financial services space.
The company launched its own buy now, pay later product last year.
just launched an interest-bearing savings account in partnership with Goldman
Sachs. The account currently boasts an annual percentage yield of 4.15%, while
the national average is only around 0.4%.
company is also looking to other high-octane industries on which to build out
its growth story. While it still has a modest footprint in the advertising
space, it's estimated that Apple could be generating more than $10 billion in
ad revenue alone by the end of next year.
there's the much anticipated virtual reality headset, which by some reports
could be out as early as June of this year.
possibly an even bigger product on the horizon that can be an absolute game
changer. It is still believed that Apple is working on an electric vehicle.
Unsurprisingly, information about this is scarce, but it's hard to imagine a
scenario where an automobile designed and made by Apple, with integration into
the software ecosystem, doesn't immediately become a hit. And because the car
market is gigantic, this has the potential to move the needle for the
In a recent note to clients, Morgan Stanley analyst Erik Woodring called
Apple "the best house in a challenged neighborhood." He rates Apple
stock a "top pick" with a price target of 180.
Woodring predicts Apple will post in-line results but guide analysts
lower for the June quarter.
However, he sees several catalysts for Apple stock in the months ahead.
They include the rumored introduction of a mixed-reality headset at the
company's Worldwide Developers Conference in June.
Other catalysts could include re-accelerating services growth in the
June quarter and easing foreign-exchange headwinds. Plus, Apple should see a
pickup in handset sales with the launch of the iPhone 15 series this fall,
Deutsche Bank analyst Sidney Ho expects Apple to deliver in-line results
and give mixed guidance. He rates Apple stock as buy with a price target of
"Investors are attracted by the company's quality of earnings and
its strong balance sheet in an uncertain macro environment," Ho said in a
note to clients. "We expect this investor preference to continue."
to the issued ratings of 32 analysts in the last year, the consensus rating for
Apple stock is Moderate Buy based on the current 2 sell ratings, 4 hold ratings
and 26 buy ratings for AAPL. The average twelve-month price prediction for
Apple is $170.09 with a high price target of $205.00 and a low price target of
Apple isn't usually the first to bring a new product to market, it has proven that
what it offers can be the best. Finding ways to have a higher number of active
devices across the world, whether it's phones, tablets, headsets, or cars,
feeds into Apple's powerful ecosystem, making its economic moat that much
Apple has a market
capitalization of $2.66 trillion, a price-to-earnings ratio of 28.59, a
price-to-earnings-growth ratio of 2.18 and a beta of 1.30. Apple has a
fifty-two week low of $124.17 and a fifty-two week high of $176.15. The firm
has a 50-day simple moving average of $157.78 and a 200-day simple moving
average of $147.65. The company has a debt-to-equity ratio of 1.76, a quick
ratio of 0.89 and a current ratio of 0.94.
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