August 7, 2017

Apple stock is fully priced | Short AAPL

Shares of Apple has surged after reporting earnings last week, with strong top and bottom line beat, and just as strong guidance, despite a small iPhone sales miss in the current quarter.

Apple sold 40.0 million iPhones, just below the 40.1 million expected, 1.5% higher than a year ago, despite also missing on ASPs (which came in at $606, below the $628 expected) while Chinese revenues disappointed once again declining by 9.5% Y/Y. However, the silver lining, and what most appear to be focused on was Apple's strong forecast, with the company forecasting $49 billion to $52 billion in revenue for the upcoming, critical quarter, a range that was well above sell-side consensus of $49.12 billion, suggesting Apple is quite optimistic about the upcoming iPhone 8 product launch.

Also helping AAPL this quarter was an unexpected boost from iPad sales, with Apple selling 11.4 million units in the quarter, 15% higher than the 10 million it sold a year ago, and well above expectations. 

Doug Kass thinks that Apple is priced to perfection, 
"I believe the shares of Apple are fully priced, at best, as I think the earnings growth rate for the company is less than the consensus views it. But mine continues to be a minority view."