Apple reported another stellar quarter as its earnings rose by 25% year over year and its stock appears to be more steady, Stephen “Sarge” Guilfoyle argued recently on Real Money.
The stock’s technical indicators, relative strength and especially the full stochastics oscillator, are recovering from the oversold conditions, Guilfoyle noted.
“As AAPL shares attempt to recover from an early 2022 sell-off set up by a ‘double top’ formation, the shares appears to have found some footing at the 61.8% Fibonacci retracement level of the early October into year's end rally,” Guilfoyle wrote.
Guilfoyle reiterated his target price of $191 for Apple.
Apple’s revenue beat Wall Street’s estimates by 11.2% and reported operating cash flow of $46.97 billion and free cash flow of $44.2 billion. The company has total debt of $123 billion and cash and marketable securities totaling $203 billion and has a net cash position of $80 billion.
"Apple reiterated the firm's intention to get to cash neutral over time," Guilfoyle wrote. "That's why that $80B net cash position mentioned above is such a big deal. That's why the enormous cash flow is so important."
Apple performed well in its segment division which sells the iPhone, iPad, Mac and wearables, home and accessories and generated sales of $104.4 billion, an increase of 9%. This division accounts for most of Apple’s quarterly sales or 84.25% while generating 73.96% of gross income at a segment gross margin of 38.42%.
The company’s services division which includes Apple music, video, advertising, all payment services (including Apple pay) and the iCloud, reported sales of $19.516 billion, up 23.8%. This division accounts for 15.75% of total quarterly sales and generates 26.04% of gross income at a segment gross margin of 72.37%.
