Last week, Apple Inc (NASDAQ:AAPL) released its latest earnings results, which continued to show strong growth with sales rising 20% year over year. The company beat its expectations on both revenues and earnings, but on Friday the stock declined 7% and analysts were concerned about the results.
The concern was that Apple forecasted a slightly weaker estimate for Q1 than expected, and that the company will stop reporting unit sales and the iPad, iPhone, and Mac sales will all be grouped together. These seemingly trivial reasons were apparently enough to cause panic among Apple investors.
Unfortunately, the markets can be very fickle and just about anything can send stocks into a free fall. An earnings beat and impressive growth simply doesn’t matter to investors if not everything is exactly what they want to hear.
It’s unfortunate, but for investors that can see beyond that, it could create a terrific buying opportunity. Apple’s stock has risen more than 22% year to date and it still trades at a very modest 19 times earnings. Whether or not you can break out iPhone vs iPad sales or not shouldn’t matter, as the company has proven to have a very strong following and a business model that sent it to a market cap of $1 trillion earlier this year.
The stock is not in any trouble as a result of its latest earnings report, despite what the critics may have you believe. However, you may want to wait a little more to see if the stock continues to drop, as it could be a great buy if the price gets even lower.
