Could Apple Inc. (AAPL) Gain Back “Lost Ground” in Education Market? Top Analyst Weighs in

Amit Daryanani praises the tech titan's fresh education push as a strategic move against Google's low cost Chromebooks.


Apple Inc. (NASDAQ:AAPL) has its eyes on sinking its teeth deeper into the education market.

Yesterday, the tech titan unleashed a new affordable iPad, hosting the event at Chicago’s Lane Tech High School. Schools will be able to buy this iPad bolstered with Pencil support – the likes of which are usually available on the pricier iPad Pro – for only $299. The public in turn will shell out $329 for the new iPad.

CEO Tim Cook and co. also showcased various other new and updated educated apps, all with the intent of improving the classroom experience for students and teachers alike. Lastly, the AAPL team is upgrading free iCloud storage for students from the 5GB presently offered to a massive 200GB.

Top analyst Amit Daryanani at RBC Capital chimes in on the company’s “push” in the education arena, calling it not only a “timely one” but a much “needed response to GOOGL.”

After all, rival GOOGL has made “significant inroads through its low cost Chromebooks (starting $149) over past few years,” notes the analyst.

Citing a New York Times article, the analyst notes that GOOGL rocketed from a “small market share” six years ago to lead the forefront of the market, now shipping around three times the amount of competitors Microsoft and Apple: 7 to 8 million devices to schools. Present-day, over half of primary school and secondary school students in the U.S. are solidifying GOOGL’s leadership position- over 30 million students are using the company’s education apps.

“While education market in itself may not be large in size or margins, longer term it does create an opportunity to transition users into a specific ecosystem, making it strategically important. We’ll see if AAPL’s renewed push into the market and differentiated features around AR, security and new apps, will help the company gain some of the lost ground,” Daryanani writes, bullish on the “multiple tailwinds – capital allocation, services growth, GM upside and attractive valuation” he sees for Apple.

Notably, “The initially successful iPad has had lackluster sales over the past four years. We think it makes sense to push iPad beyond homes into education and enterprise markets even if it is at a slight discount, given that AAPL story longer term is increasingly install base and services driven,” Daryanani concludes, saying to put it simply, the goal here is to “catch’em [while they’re] young.”

Therefore, the analyst reiterates an Outperform rating on AAPL stock with a $205 price target, which implies a close to 23% upside from current levels.

Amit Daryanani has a very good TipRanks score with an 87% success rate and one of the highest rankings on Wall Street: an impressive #10 out of 4,768 analysts. Daryanani yields 29.2% in his yearly returns. Investors following Daryanani’s recommendations on average will realize 28.7% in profits on AAPL stock.

TipRanks analytics show off positivity circling the big AAPL machine when it comes to the word on the Street. Out of 29 sell-side analysts polled in the last 3 months, 16 are bullish on AAPL stock while 13 remain sidelined. With a healthy return potential of nearly 14%, the stock’s consensus target price stands at $191.30.