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April 24, 2021, 10:17 a.m. EDT

Should you buy Apple stock? Here are the key numbers to look at now

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By Philip van Doorn

Apple Inc. kicks off a new snapshot series for the most-searched-for companies on MarketWatch.

The quarterly review will show comparisons of key metrics to watch and companies’ most important issues to help investors makes decisions about whether to own shares.

The updates will include comparisons of results to competitors. Keep in mind that no two companies are alike — even rivals don’t compete in every space. Any investor needs to do their own research to make informed long-term decisions.

Where Apple fits in

As the largest company in the world, when measured by market capitalization, Apple /zigman2/quotes/202934861/composite AAPL +1.98% is contrasted with its largest “big tech” rivals — the company remains mostly a hardware maker, while others among the largest tech players are growing sales more quickly and have businesses that center more on intellectual capital and services. But Apple’s Services category — including cloud storage and backup, digital content and payment services — is growing rapidly and is its second-lagest reported business category.

Key metrics

Apple’s fiscal year ends on the last Saturday in September. So its fiscal first quarter ended on Dec. 26. Here are some of the most important numbers that professional investors keep an eye on for the company and its rivals.

Sales growth

The company reports its sales by product/service line and also by geography. With its hardware focus, Apple’s business is highly seasonal, so sales in its December quarter made up 38% of sales over the past four reported quarters.

Here are sales comparisons by product/service category:

And by geographical segment:

Apple’s greatest sales growth was in China. This segment’s sales made up 19.1% of the total during the December quarter, up from 14.8% a year earlier.

Read: The pandemic may have permanently altered Apple’s path

Pricing power and profitability

Here are year-over-year comparisons of gross margins and operating margins for Apple and five other large tech-oriented companies. Each company has a unique mix of business lines. This means a direct comparison isn’t meaningful. Apple and Nvidia Corp. /zigman2/quotes/200467500/composite NVDA +4.23% are mainly hardware companies. Facebook Inc. /zigman2/quotes/205064656/composite FB +3.50% is a service company. Microsoft Corp., Alphabet Inc. /zigman2/quotes/202490156/composite GOOGL +2.21% /zigman2/quotes/205453964/composite GOOG +2.40% and Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +1.94% have all been successful in building large, international corporate cloud-services business — but all three derive more revenue from other lines.

Here’s a comparison of sales growth figures, gross margins and operating margins for all six companies for their most recent reported quarters and year-earlier quarters.

A company’s gross margin is its sales, less the cost of goods sold, divided by sales. It is a measure of pricing power. An expanding gross margin with growing sales is a good sign. If the gross margin is contracting, it could mean a company is being forced to increase use of discounting to stave off competition. Comparing only two periods may not be especially meaningful, but it is important to understand if there is a trend.

/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 127.45
+2.48 +1.98%
Volume: 81.92M
May 14, 2021 4:00p
P/E Ratio
28.60
Dividend Yield
0.69%
Market Cap
$2126.84 billion
Rev. per Employee
$1.86M
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/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 569.72
+23.11 +4.23%
Volume: 6.47M
May 14, 2021 4:00p
P/E Ratio
82.60
Dividend Yield
0.11%
Market Cap
$354.58 billion
Rev. per Employee
$878,788
loading...
/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 315.94
+10.68 +3.50%
Volume: 19.25M
May 14, 2021 4:00p
P/E Ratio
27.03
Dividend Yield
N/A
Market Cap
$895.84 billion
Rev. per Employee
$1.47M
loading...
/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 2,278.38
+49.34 +2.21%
Volume: 1.60M
May 14, 2021 4:00p
P/E Ratio
30.33
Dividend Yield
N/A
Market Cap
$1539.11 billion
Rev. per Employee
$1.35M
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 2,316.16
+54.19 +2.40%
Volume: 1.33M
May 14, 2021 4:00p
P/E Ratio
30.84
Dividend Yield
N/A
Market Cap
$1539.11 billion
Rev. per Employee
$1.35M
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,222.90
+61.43 +1.94%
Volume: 3.33M
May 14, 2021 4:00p
P/E Ratio
61.33
Dividend Yield
N/A
Market Cap
$1625.39 billion
Rev. per Employee
$297,430
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