This is a step-by-step stock review to answer the question, is Apple (AAPL) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
1. Apple Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1976 in Cupertino, California by Steve Jobs, Steve Wozniak, and Ronald Wayne.
- Introduced the Apple II in 1977, a pioneering personal computer.
- Launched the Macintosh in 1984, setting new computing standards with its graphical user interface and mouse.
- Steve Jobs’ return in 1997 reignited innovation and design focus.
- Revolutionized the music industry with the iPod and iTunes in the early 2000s.
- Transformed the mobile phone market with the launch of the iPhone in 2007.
- Diversified into services like the App Store and Apple Music.
- Committed to environmental sustainability, reducing its carbon footprint and promoting renewable energy.
- Continued innovation with products like the iPad, Apple Watch, and AirPods.
- Profound cultural influence, impacting communication, work, and daily life.
Here are a few of the other companies that Apple (AAPL) has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 61/100
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Apple (AAPL) makes money:
- Selling iPhones, iPads, Macs, and other devices: Apple makes money by selling its popular range of electronic devices.
- Services: Revenue comes from various services like the App Store, Apple Music, iCloud storage, and AppleCare.
- Accessories: Sells accessories such as AirPods, cases, and chargers, generating additional income.
- Software sales: Earns money from sales of software applications and subscriptions like Apple Arcade and Apple TV+.
- Digital content: Revenue from sales of digital content like music, movies, TV shows, and books through platforms like iTunes and Apple Books.
- Licensing and royalties: Generates income from licensing its technology and receiving royalties from third-party developers and manufacturers.
- Apple Pay: Makes money through transaction fees from Apple Pay, its digital payment service.
- Advertising: Although not a primary revenue stream, Apple earns some money from advertising within its services like the App Store and Apple News.
- AppleCare: Offers extended warranties and support services for its products, earning revenue from service fees and subscriptions.
- Financing: Provides financing options for customers purchasing Apple products, earning interest or fees from financing agreements.
Here are a few of the other companies that Apple (AAPL) has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Beats Electronics
- Shazam
- NextVR
- Dark Sky
- Akonia Holographics
- Texture
- Siri Inc.
- AuthenTec
- NeXT
- Emagic
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Apple (AAPL) stacks up against other companies.
- Alphabet (GOOGL) – 72/100
- Microsoft (MSFT) – 67/100
- Dell (DELL) – 67/100
- Apple (AAPL) – 61/100
- Turtle Beach Corporation HEAR – 56/100
- HP (HPQ) – 56/10
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Expanded Apple’s revenue and market capitalization, making it one of the most valuable companies globally.
- Oversaw the successful launch and growth of iconic products like the iPhone, iPad, and Apple Watch, driving significant revenue and market share.
- Diversified Apple’s product lineup with new categories such as wearables and services, reducing dependence on iPhone sales.
- Strengthened Apple’s commitment to privacy and security, advocating for user rights and implementing industry-leading measures to protect customer data.
- Advanced environmental sustainability initiatives, with Apple committing to carbon neutrality across its supply chain and operations.
- Focused on corporate social responsibility, implementing programs to support education, diversity, and community development.
- Led Apple’s expansion into new markets, including China and India, driving sales and brand awareness internationally.
- Fostered a culture of innovation and creativity within Apple, encouraging collaboration and experimentation among employees.
- Successfully navigated challenges and controversies, maintaining Apple’s reputation and brand integrity.
- Positioned Apple as a leader in accessibility, with products and features designed to empower users with disabilities.
- Tim Cook’s leadership has solidified Apple’s position as a technology powerhouse, driving innovation, growth, and societal impact.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Apple (AAPL) is 79/100.
To see the most up-to-date 4M Score, please log into Tykr.
8. Is Apple (AAPL) stock a good buy?
Some of the top questions investors can have is Apple (AAPL) stock a good buy or should I buy Apple (AAPL) stock?
Investing in Apple can be advantageous for several reasons. Apple is a tech giant with a strong brand, innovative products, and a loyal customer base. Its diverse product lineup, including the iPhone, iPad, and Mac, generates substantial revenue and profits. Additionally, Apple’s growing services segment, which includes the App Store, Apple Music, and iCloud, provides recurring revenue and margin expansion opportunities. Furthermore, Apple’s commitment to privacy, security, and environmental sustainability enhances its reputation and customer trust. However, potential drawbacks to consider include Apple’s dependence on iPhone sales for a significant portion of its revenue, as well as competition, regulatory risks, and global economic factors. Overall, whether Apple is a good investment depends on factors such as investment objectives, risk tolerance, and evaluation of its future growth potential and competitive position.
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To truly know if Apple (AAPL) is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
If you found this stock review interesting, you may also like this review on Microsoft.