Shares of Apple (NASDAQ:AAPL) reached a new 52-week high of $133.00 on Feb 23rd. The iPhone maker has had a bullish run since the beginning of this year having witnessed record results. Further, the company’s strong cash position is allowing it to pursue innovative product launches, investments in new sectors, as well as strategic collaborations that have been making the headlines consistently.
Apple has returned about 76.5% in the last one-year period with a year-to-date return of about 20.5%. The S&P 500 jumped 14.2% and 2.5%, respectively, during the same period. Average volume of shares traded over the last three months stands at approximately 55.7 million.
Furthermore, the company delivered a positive average earnings surprise of 11.4% over the past four quarters. This Zacks Rank #2 (Hold) stock has an enviable market cap of approximately $755.5 billion and a long-term expected earnings growth rate of 13.8%.
Key Growth Catalysts
Apple’s earnings, this quarter, had surged 47% on a year over year basis on a 30% rise in revenues. In addition to the strong demand for the larger-screened iPhone 6 and iPhone 6 Plus phones, the possibility of Apple venturing into the electric cars market, the growing adaptability of Apple Pay and most of all the nearing launch of Apple watch are key drivers for Apple. Furthermore, the company recently became the first U.S. company to cross the $700 billion milestone.
Apple watch that is expected to be launched in April is likely to come with a range of innovative features ranging from making payments with Apple Pay to doubling up as a fitness device and more.
Yesterday, Apple unveiled a €1.7 billion plan for constructing a couple of data centers in Europe. While the company already has a sturdy pile of cash to support such endeavors, it has been taking additional measures to save costs and improve profitability in the long run. These two data centers will be completely powered by renewable energy.
Last month, Apple had collaborated with First Solar (NASDAQ:FSLR) for the purchase of solar power worth $850 million. This deal is another major step by the company to strengthen its core. The solar farm will be big enough to provide the required electricity for powering all Apple set-ups in California, including stores, offices, headquarters as well as the data center.
Recently, Apple also won patent rights for a virtual reality headset. This device, resembling bulky goggles, will display the iPhone screen virtually in front of the user’s eyes according to media reports.
The company’s persistent focus on developing superior quality products and a loyal customer base no doubt gives it an edge in the industry.
Estimate Revision
Apple has seen solid earnings estimate revisions for the current fiscal year and next over the past month. Almost 86% of analysts have revised their estimates for this year and 74% of analysts for next year. Moreover, in the last one month, the Zacks Consensus Estimate for fiscal 2015 has risen about 8.3% to $8.44 while fiscal 2016 estimates climbed around 4.5% to $9.10.
To Conclude
Despite the strong price appreciation, we believe that Apple still has enough room left for upside, given the positive estimate revisions.
A couple of other technology stocks that also scaled 52-week highs on Feb. 23rd are Amazon (NASDAQ:AMZN) and Automatic Data Processing (NASDAQ:ADP).