Apple Stock: Is Apple Inc. (AAPL) Stock A Buy Ahead Of Q1 Earnings?

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The Performance Of Apple Services Segment

Apple Inc. (NASDAQ:AAPL)’s services segment was the 2nd largest revenue segment for Cupertino, over the last 3 quarters. The segment closed 2016 with $24.35B in revenue, outdoing the $22.8B revenue generated by the Mac segment and $20.63B revenue generated by the iPad segment. Moreover, the segment posted 22% YoY growth in 2016, making it Apple’s fastest growing segment. With 60% gross margins, the services segment will also be margin accretive for Apple. This should have a meaningful impact on Apple’s bottom line. Given the high growth and high margin profile of the services segment, this segment has emerged as a clear revenue/earnings catalyst for Apple, and investors will be closely tracking the performance of this segment.

Putting It All Together

Apple Inc. (NASDAQ:AAPL) is scheduled to announce its Q1 2017 earnings report, after the bell, on January 31. Wall Street analysts expect the company to post 2% YoY top line growth, a break from 3 consecutive quarters of revenue decline. As always, Investors will be closely watching the performance of the iPhone segment, which has seen mixed reports from different sources. In context of recent reports of iPhone production cuts doing the rounds, the Q2 2017 guidance will be of great significance. A meaningful upside to current Q2 expectations could send Apple stock price higher in post-earnings trade. However, we believe that Apple stock is an attractive long-term investment, and long-term investors should use any post-earnings pullback to accumulate AAPL stock on the cheap.

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The article Apple Stock: Is Apple Inc. (AAPL) Stock A Buy Ahead Of Q1 Earnings? originally appeared on amigobulls.com. Watch our analysis video on AAPL (2)

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Additional Links:

(1) http://appleinsider.com/articles/17/01/24/strong-iphone-7-plus-adoption-seen-boosting-asp-apples-dec-quarter-results?ref=il

(2) http://amigobulls.com/stocks/AAPL/analysis?ref=im

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