Cho Research

About the Author Cho Research

Best tech/finance blogger on TipRanks. Alex Cho is ranked 7th among all financial bloggers, with a sector focus of technology stocks. The research he publishes captures the long-term growth potential of tech franchises, and market valuation. His research recommendations over the span of five-years has averaged into an annualized return of 19.3% across 392 ratings of which 66% were successful. Over his years of publishing, Alex Cho has been an indispensable source of information for an investment minded audience, which is why his lifetime viewership has exceeded ten million in total since 2012, across various media platforms. Furthermore, he’s frequently cited in various local business journals across the United States, and is frequently tagged with the “in-depth” designation on Google News for his public articles. The quality of his research is well known, and is well-respected which is why he’s frequently cited by other authors, journalists, bloggers and experts. Alex Cho was a former founding partner of Alexander & Cohen Capital Management, has worked as a consultant for mid-stage tech companies looking to raise capital or form an exit strategy, with the most recent consultation billed to a client that was generating revenue of $10 million+ in the web domain/registrar segment. Alex Cho is frequently invited to interview members of management at various Fortune 500 tech companies’ due to his outstanding media credentials, and credibility. Furthermore, he frequently attends various tech media events at the request of the event organizers. Alex Cho has a great relationship with Wall Street and Silicon Valley, as well. In the Venture Capital Space, he has sources that are inclusive of VC Partners, and independent research from PitchBook, Mercury Data, eMarketer, MergermarketGroup, and so forth. Anyone facing the public with investment related material needs quality sources, which should be inclusive of insights from Private Equity and various sell-side institutions and debt rating agencies as well (Standard & Poor’s, Fitch, & Moody’s). Alex Cho publishes with the support of Bank of America Merrill Lynch, Morgan Stanley Americas, Royal Bank of Canada Capital Markets, United Bank of Switzerland AG, Barclays Americas, Goldman Sachs, J.P. Morgan, Credit Suisse AG, PiperJaffray, Wedbush Securities, Oppenheimer & Co., Nomura Securities, BMO Capital Markets, Raymond James, Pacific Crest, SunTrust, Mizuho Securities, Deutsche Bank and Canaccord Genuity. Alex Cho attended ASU via the MAPP program with a 3.76 GPA in business-finance. The genius behind Cho has less to do with his academic accomplishments, but rather his ability to navigate, adapt, and improve the quality of his work through all the activities he has engaged. In the past year, Alex Cho has launched a new marketplace service referred to as Cho’s Investment Research. To learn more about this service, or to receive article notifications, be sure sure to subscribe. We provide frequent updates via our Blog Posts, which goes out to our subscribers.

Apple (AAPL) Stock: Now That’s a Go Ahead!


Apple (AAPL) reported a surprisingly solid quarter with the company delivering above expectations on both revenue and dil. EPS. Specifically, the tech giant reported revenue of $58.015 billion and dil. EPS of $2.46, beating to consensus estimates of $57.37 billion and dil. EPS of $2.36. Investors reacted positively to the earnings beat, bidding up the stock nearly 7% in Wednesday’s trading session.

Apple also provided guidance for the quarter ending June 30 2019 for “revenue between $52.5 billion and $54.5 billion Gross margin between 37 percent and 38 percent. Operating expenses between $8.7 billion and $8.8 billion. Other income/(expense) of $250 million and tax rate of approximately 16.5 percent.”

Revenue outlook of $52.5 billion-$54.5 billion beat consensus estimates of $51.93 billion at both the low-end and high-end of the range. Apple also announced an additional “$75 billion for share repurchases and Apple’s board of directors has declared a cash dividend of $0.77 per share of the Company’s common stock, an increase of 5 percent.”

It was a toss-up quarter, but with results that beat expectations overall despite weakness in smartphone and computer sales. iPhone revenue declined y/y -17.3% from $37.559 billion (Q2’18) to $31.051 billion (Q2’19), iMac sales declined by -4.5% from $5.775 billion to $5.513 billion. The weakness tied to smartphones and desktop/notebook computers conforms with the weak results reported by peers. Both smartphone and computer shipments are expected to decline this year according to global unit forecasts.

Apple’s quarter was viewed as a success, because it was less dependent on smartphone sales to sustain topline results. iPad revenue grew from $4 billion to $4.872 billion representing +21.8% y/y growth, wearables, home and accessories also grew from $3.944 billion to $5.129 billion representing +30% y/y growth, and Services also grew from $9.85 billion to $11.45 billion adding +16% y/y growth.

Despite the significant drop-off in iPhone revenues -17.3% y/y, Apple itself reported a more modest -5.1% y/y decline in revenue. Apple’s other business segments offset some of the weakness in smartphone results, which positions Apple favorably when smartphone results start to improve.

Luca Maestri (CFO) also mentioned on the earnings call, that the financial terms of the agreement with Qualcomm will not be discussed. But, financial outlook for gross margin of 37% to 38% does reflect the impact from the Qualcomm agreement. Tim Cook (CEO) also mentioned that a number of new services will contribute to service revenue growth, such as Apple News+, Apple TV+, Apple Arcade, and Apple Card. On-going service revenue ramp will offset some of the weakness in smartphone/PC revenue.

Daniel Ives from Wedbush Securities mentioned in a note on Tuesday following Apple’s earnings announcement:

In a nutshell, the company beating the Street and most importantly guiding stronger for June will put “major fuel in the engine” for the bulls tomorrow morning and ultimately put shares on a path to make new highs in our opinion over the next 3 to 6 months. The skeptics continue to scratch their heads at the meteoric move in Apple’s stock since early January lows and this report/guidance is just another major step in the right direction for Cook and Cupertino as they navigate near-term turbulence in China which appears to be slowly abating. We maintain our OUTPERFORM rating and $225 price target.

Overall, Apple’s Q2’19 results, and financial guidance painted a much better forecast than what investors were anticipating. Assuming, the smartphone-cycle shows patterns of recovery, the return to revenue growth will keep bulls optimistic. WWDC 2019 in June and the pre-launch iPhone events could add upside to shares. Investors have reset expectations tied to a smartphone turnaround until next-year with near-term financial results strong enough to keep investors onboard.

 

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