Trade Alert

Short Apple

_{Posted by Club Member JPT_Stanley 20.10.23}

Apple had 3 quarters of negative year-over-year revenue growth. IF Apple meets its guidance for the upcoming quarter, it will mean 4 quarters in a row of negative yoy revenue growth.

Reports coming out of China are indicating that while smartphones sales in China saw positive growth yoy, led by high double-digit growth in Android sales such as Huawei and Xiaomi, Apple iPhones saw significant double-digit declines, and volume growth yoy has been negative since iPhone 15 launched.

If this trend continues, weak demand in China could eventually lead to lower-than-expected global shipment of iPhone 15 in 2023.

57% of Apple’s revenues are from outside the US. Additionally, the US dollar is up 7% since Apple’s last earnings guidance, which means FX will also be a drag on Apple’s sales figure for the coming quarter.

Yet, despite these risks to topline growth, Apple still currently trades at 27x forward earnings! Apple is more likely to miss on revenues and might even miss on earnings in its next quarterly report, if so, the stock could re-rate to a lower multiple. In any case, I see multiple paths for Apple’s stock price to trade much lower from here.

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#Apple #New Ideas #Short

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