This video is going to be the first in a series where we walk through
the stock analysis of the largest and most influential companies in the world.
Yes, we're talking about the FAANMG stocks! Although people include different stocks within that
FAANMG acronym, we're going to cover Facebook apple Amazon, Netflix, Microsoft and Google. First, we're
going to start with Apple, known as the world's most valuable company. In it's latest earnings
report, apple posted an all-time revenue record of 123.9 billion dollars up 11 year-over-year
and quarterly earnings per share of 2.10 apple's waiting alone in the S&P 500 index is about 7%,
reaching 3 trillion on the first day of 2022. Apple's market cap is bigger than the GDP of 25
different countries in the world and these include countries like Ecuador, Libya, Iraq, and many more!
Apple also employs 154,000 people worldwide and it earned over $691,000 per minute in the
first quarter of 2021. Apple, Inc designs manufactures and sells smartphones personal
computers tablets wearables and accessories and a variety of related services it operates
through the following geographical segments the americas europe greater china japan and the rest
of asia pacific let's talk about the first quarter highlights for apple total net sales increased 11
or 12.5 billion during the first quarter of 2022 compared to the same quarter in 2021
this is driven primarily by growth in iphone services and mac during the first quarter of 2022
the company released the following new products macbook pro available on 14 and 16 inch models and
powered by an apple m1 pro chip or an apple m1 max chip third generation of air pods and apple watch
series 7. the company repurchased 20.4 billion of its common stock and paid dividends equal to
3.7 billion during the first quarter of 2022. here's a breakdown of apple's products and
services segments iphone services wearables holmen accessories mac and ipad here how those
business segments break down in terms of revenue iphone sales make up 58 of the revenue services
make up 16 wearables home and accessories makes up 12 mac makes up 9 ipad makes up 6
iphone sales increased during the first quarter of 2022 compared to the same quarter in 2021
due to higher sales from the company's new iphone models launched in the fourth quarter of 2021
and a different mix of iphone sales there are four models of iphones including iphone the mini
pro and max in 2021 iphone revenue was 191.9 billion over 242 million iphones were sold and
the sales of iphones have fallen each year since 2015 in china from a high of 71.2 million in 2015
to 34.9 million in 2020. all other regions have been steady in terms of sales aside from china
as of 2021 there's 1.2 billion active iphone units out there one-fifth of those or 211 million
are from the us alone services net sales increased during the first quarter of 2022
compared to the same quarter in 2021 due primarily to higher net sales from advertising the app store
and cloud services services sales include sales from the company's advertising apple care cloud
digital content payment and other services services revenue was 68.4 billion in 2021 and
some analysts see it as the most important segment of the company potentially reaching 50 billion in
profit by 2025 just by itself apple has seen the number of subscribers to its services increased
dramatically over the past six years this stat includes subscriptions to icloud apple music apple
tv plus apple arcade apple news plus and apple fitness plus as of 2021 there are 745 million
subscribers to the different apple services wearables home and accessory sales increased
during the first quarter of 2022 compared to the same quarter in 2021 due primarily to higher sales
of airpods apple watch and accessories wearables home and accessories net sales include sales of
earpods apple tv apple watch beats products home pod mini ipod touch and accessories we estimate
that airpods is a 10 billion dollar business on its own with apple watch also potentially
contributing 12 to 14 billion dollars per year in 2021 this segment generated 38.3 billion in
revenue since it launched in 2015. apple watch has led the smartwatch market with over 50 market
share in 2021 in 2021 over 46.1 million apple watches were sold over 85 million airpods were
sold over 14.8 million home pods were sold there were about 30 million active apple tv devices
mac net sales increased during the first quarter of 2022 compared to the same quarter in 2021 due
primarily to higher net sales of macbook pro and macbook air apple has kept a core set of products
the macbook air the macbook pro the mac pro and the imac 25.7 million macs were sold in 2021 for
35.1 billion dollars in revenue highly anticipated after the success of the iphone the ipad made
an immediate mark adding 19 billion to apple's revenue in the first year ipad sales peaked in
2013 with the launch of the ipad mini enticing 97 million customers ipad sales decreased during the
first quarter of 2022 compared to the same quarter in 2021 due to primarily the lower net sales of
the 10 inch version of the ipad in 2021 the ipad revenue was 31.8 billion over 57.8 million ipads
were sold the strong customer response to apple's recent launch of new products and services drove
double-digit growth in revenue and earnings and helped set an all-time high for their installed
base of active devices and this all led to strong revenue growth for apple and they're averaging
about 13 year-over-year now for eps growth apple is averaging 19 year-over-year and for free cash
flow growth they're averaging about 11 per year apple's primary revenue generator in recent
years has been the iphone but with the smartphone market becoming increasingly saturated apple sales
and earnings have suffered some imply that the company is at a maturity phase of its life
cycle and is approaching a crossroads apple could experience either a rebirth or a slow decline as
its products face increasing competition now let's look at a five-year chart of apple stock apple is
currently following a trendline that started back in march of 2020 during that covid crash as you
can see apple dropped 35 during that time and it's climbed over 243 to all-time highs since then the
gray lines are support and resistance lines and this is where the stock has had multiple reactions
in the past so look for similar reactions moving forward at those price points when it comes to
valuation we look at over 12 different models to calculate fair value for the stocks that we track
your value is the real or underlying intrinsic worth based on 15 different models we believe
apple's average for your value is 162 leaving 3 downside potential from the current price from
40 analyst targets apple's average target price is 191. its 52 week low is 122 and its high is
183 so let's talk about what the bulls say about apple stock total net sales increasing
11 are 12.5 billion during the first quarter of 2022 compared to the same quarter last year
driven primarily by growth in iphone services and mac the company repurchased 20.4 billion of its
common stock and paid dividends equivalent to 3.7 billion during the first quarter of 2022. between
greater smartphone penetration in emerging markets and repeat sales to current customers apple has
plenty of opportunity to reap the rewards of its iphone business apple's iphone and ios operating
system have consistently been rated at the head of the pack in terms of customer loyalty engagement
and security which bodes well for long-term customer retention apple is still innovating with
introductions of apple pay apple watch apple tv and earpod each of these could drive incremental
revenue but more crucially help to retain iphone users over time the price is above a 200-day
moving average the average analyst target price is 191 dollars well over the current stock price
10-year revenue growth is 13 free cash flow growth is 11 and eps growth is 19 so now let's talk about
what the bears are saying apple's decision to maintain this this premium pricing strategy
may help fend off gross margin compression but it could limit sales growth as devices may become
unaffordable for some of their customers if apple were to launch a buggy software update or sub-par
services it could diminish its near perfect reputation for building products that just work
apple is also behind some of the companies like google and amazon in artificial intelligence or
ai apple is also believed to be behind google and amazon in artificial intelligence or ai
development and this is notably in the siri voice recognition and this could be problematic as tech
firms look to integrate ai in order to deliver premium services to customers in the future
apple lacks sufficient margin of safety warren buffett recommends buying stocks at a 40 discount
from their fair value price to account for potential calculation errors and unknown factors
apple has a narrow economic moat according to warren buffett an economic moat is a distinct
advantage a company has over its competitors which allows it to protect its market share
and profitability their debt to equity ratio is over 170 percent and we prefer that to be under 40
per warren buffett's advice competitors in their markets use a combination of aggressive pricing
low-cost structures imitating apple's products and infringing on its intellectual property so to help
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do you already own it stock or are apple investors on track or missing something
in your mind be sure to check out our other stock analysis videos on companies like tesla
neo alibaba and more and check out this video that breaks down the top holdings in
our million dollar stock portfolio thank you guys so much for watching we'll see in the next video