Apple Inc (AAPL, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial position. Despite a slight daily loss of 0.44% and a three-month decline of -3.43%, the company's stock price stands at $182.58, reflecting its substantial market resilience. A detailed evaluation using the GF Score indicates that Apple Inc is poised for significant growth, backed by solid financial metrics and strategic market advantages.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system from GuruFocus, which evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These components are weighted differently and have been backtested from 2006 to 2021, showing a strong correlation with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. For Apple Inc, the GF Score is an impressive 94 out of 100, indicating a high potential for outperformance.
Understanding Apple Inc's Business
With a market cap of approximately $2.8 trillion and annual sales of $381.62 billion, Apple Inc stands as one of the world's largest companies. The tech giant boasts a diverse portfolio of hardware and software products, with the iPhone accounting for the majority of its sales. Apple's ecosystem also includes Mac, iPad, and Apple Watch, all integrated with its software applications like streaming video services and augmented reality. The company designs its own software and semiconductors and collaborates with subcontractors such as Foxconn and TSMC for manufacturing. Notably, slightly less than half of Apple's sales are through its flagship stores, with the majority coming from partnerships and distributors.
Financial Strength Breakdown
Apple Inc's financial robustness is reflected in its Financial Strength Rank of 7 out of 10. The company's Interest Coverage ratio is a remarkable 59.12, significantly higher than Benjamin Graham's recommended minimum of 5, indicating strong capability to meet interest obligations. Additionally, an Altman Z-Score of 8.75 suggests a low probability of financial distress. The strategic management of its debt-to-revenue ratio, which stands at 0.27, further solidifies Apple's financial health.
Profitability and Growth Metrics
Apple Inc's Profitability Rank is at a perfect 10, supported by a consistent increase in Operating Margin over the past five years, currently at 29.82%. The company's Gross Margin has also improved, reaching 44.13% in 2023. These figures demonstrate Apple's efficiency in converting revenue into profit. In terms of growth, Apple has a Growth Rank of 10, with a 3-Year Revenue Growth Rate of 15.7%, outperforming 81.68% of its industry peers.
Conclusion
Considering Apple Inc's formidable financial strength, exceptional profitability, and consistent growth metrics, the GF Score highlights the company's unmatched potential for market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen available to GuruFocus Premium members.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
