The S&P 500 has broken above the 200 day moving average, and has many bulls excited and believing a large, sustained rally is on its way. Personally, I'm skeptical that a rally will last very long, and believe a downturn will resume within 6 months. Moreover, I would suggest bears have the upper hand so long as the market remains below 410. In any event, bulls should keep an eye on the fundamentals and price action of many mega cap stocks that drive the value of many large index funds. Below we examine the fundamentals of Apple and Tesla, comparing them against each other. Admittedly, there are some signs of strength here.
A Comparison of the Net Income, Revenue and Gross Margin Growth Rates for AAPL and TSLA from March 2020 to September 2022
Over the past two years, there has been a marked trend in terms of net income for both AAPL and TSLA. As of March 2020, AAPL had a net income of $57.22 billion and TSLA had a net income of -$14.43 million. As of September 2022, AAPL had a net income of $99.80 billion and TSLA had a net income of $1.12 billion. The growth rate of AAPL's net income is much higher than that of TSLA as AAPL's net income increased by 74.71% over the two year period, while TSLA's net income decreased by 7695%. The most recent data, as of September 2022, show a slight decrease in AAPL's net income of 0.71%, while TSLA's net income continues its decline, dropping by 12.60%.
AS for revenue, Apple's revenue increased from $268 billion in March 2020 to $394 billion in September 2022, a 45% increase. In the same time period, TSLA's revenue grew even more quickly, increasing by 188%, from $26 billion in March 2020 to $75 billion in September 2022. The most recent data shows that AAPL's revenue increased by 14% from June 2021 to September 2022, while TSLA's rose by 44% from June 2021 to September 2022.
Last but certainly not least is gross margin. The trend and growth rate of Apple's gross margin over time has been steadily increasing. On March 28th of 2020, it was at 38.1%, and on September 24th of 2022, the last reported data point, it had grown to 43.4%. The trend and growth rate of Tesla's gross margin is more pronounced in its upwards trajectory . On March 28th of 2020, Tesla's gross margin was at 18.2%, but on September 24th of 2022, the last reported data point, it had grown to 26.6%.
Analysis of AAPL and TSLA Share Price Change from October 2022 to January 2023
The share price of AAPL decreased from October 28th 2022 to December 23rd 2022, then increased again to January 23rd 2023. The change was approximately -11.2%. The share price of TSLA decreased from October 28th 2022 to December 30th 2022, then increased again to January 23rd 2023. The change was approximately -37.7%.
shares were trading at $401.22 per share on Monday morning, up $5.34 (+1.35%). Year-to-date, has gained 4.91%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Simit Patel
Simit Patel has 2 decades of investing experience applying a top-down approach starting with macroeconomics followed by price action technical analysis to find more winning trades.
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