Why did one of the world's fastest growing tech companies fall twice as fast as the market?
Boy. You leave town for one day and -- if you'll forgive an expression Elmore Leonard warns writers never to use -- all hell breaks loose.
Of course, with Japan's nuclear plants burning and the Dow dropping 242 points and change, you would expect Apple (AAPL) to take a hit. So some of its $15.42 drop Wednesday (on top of Tuesday's $8.13 loss) can be attributed to the rout that drove the whole market down.
But the Dow only fell 2.04% Wednesday. Apple's shares had their third worst day ever in dollar terms, falling 4.46% before the market closed and losing another 0.94% in after-hours trading. By the time the high-frequency traders had done their worst, a company whose revenues grew 70.5% last quarter was trading -- when you subtract out its massive cash holdings -- with a forward P/E ratio in single digits.
So forgive me if I place some of the blame for what happened Wednesday on an analyst named Alex Gauna at JMP Securities. I never thought much of Gauna's work -- his Q4 2010 predictions were among the worst of 38 Apple analysts Fortune surveyed (see here) -- but he really distinguished himself Wednesday by downgrading Apple and casting aspersions on its product sales even as customers were still (five days after launch) lining up outside Apple Stores in the early morning hours to buy the latest iPad.
One of Wall Street's better analysts wonders why the stock don't get no respect
"Why does the market dislike Apple?" asks Oppenheim's Yair Reiner in a note to clients issued Monday. "It typically grants companies with 70% EPS growth and plenty of runway a premium valuation. Apple is valued at 14x (ex-cash)—like the S&P."
Reiner had earlier raised, and dismissed, the possibility that Apple's (AAPL) market cap -- at $295.89 billion the MOREPhilip Elmer-DeWitt - Jan 3, 2011 7:57 AM ET
But the fact that investors expect a Verizon iPhone in early 2011 makes its analyst nervous
In a note to clients issued early Friday, Oppenheimer's Yair Reiner addresses the yawning disconnect between Apple's (AAPL) fundamentals -- the underlying strength of its business -- and its share price.
"Apple's stock has performed admirably this year (up 37% YTD)," he writes, "but it has significantly lagged the improvement in the company's fundamentals, which have MOREPhilip Elmer-DeWitt - Oct 8, 2010 7:23 AM ET
Steve Jobs' latest iteration of the set-top box gets mixed-positive reviews on Wall Street
Piper Jaffray's Gene Munster:
We see the new Apple TV as a meaningful change in Apple's efforts in the digital living room. The addition of new content, such as Netflix, in combination with the $99 price (down from $229), will drive higher unit volumes compared to the the previous version of Apple TV. We MOREPhilip Elmer-DeWitt - Sep 2, 2010 12:49 PM ET
Analysts either don't believe Apple's revenue guidance, or they're deliberately low-balling it
Anybody who follows its earnings reports can tell you that Apple (AAPL) guides conservatively, under-estimating its forward-looking numbers to demolish them at the end of the quarter.
Only once in the past 23 quarters -- in the summer of 2006 -- did it miss its revenue guidance, by 0.7%. In the other 22 the company beat its MOREPhilip Elmer-DeWitt - Jul 25, 2010 6:13 AM ET
The bloggers beat the pros once again this quarter, but not quite as handily as before
The professional analysts who track Apple (AAPL) for banks and brokerage houses may have been surprised by the $15.7 billion in revenue the company reported Tuesday -- an all-time record for Apple in what is traditionally one of its weakest quarters.
But the blogger-analysts we polled in advance of the earnings report were not. In fact, MOREPhilip Elmer-DeWitt - Jul 21, 2010 5:53 AM ET
According to one analyst, Apple has blown past all previous launch-day records
"Guessing launch day iPhone sales," writes Oppenheimer's Yair Reiner in a note to clients issued Friday, 'has become something of a national sport, a bit like guessing whether Punxsutawney Phil will see his shadow."
But that doesn't stop him from playing the game. Reiner's guess: 1.5 million, one and a half as many iPhones as Apple (AAPL) sold in three MOREPhilip Elmer-DeWitt - Jun 25, 2010 7:38 AM ET
The HTC lawsuit capped blunt talks that have reportedly shaken their faith in Google
Oppenheimer's Yair Reiner issued a behind-the-scenes report Tuesday that sheds a lot of light on the patent suits Apple (AAPL) filed last week against HTC, the Taiwanese smartphone maker.
Citing "industry checks," Reiner writes that:
"Starting in January, Apple launched a series of C-Level discussions with tier-1 handset makers to underscore its growing displeasure at seeing its iPhone-related IP MOREPhilip Elmer-DeWitt - Mar 9, 2010 7:26 AM ET
Production is starting and should hit mass-market stride in February, says an analyst
"The manufacturing cogs for the tablet are creaking into action," writes Oppenheimer's Yair Reiner in a note to clients issued Wednesday morning.
According to his supply chain sources, Apple (AAPL) appears to be gearing up to build as many as 1 million tablet computers per month. Assuming the company would need 5 or 6 weeks of inventory before going MOREPhilip Elmer-DeWitt - Dec 9, 2009 7:11 AM ET
Production "hiccups" may depress next week's earnings, warns one analyst
Compared with the increasingly sunny predictions streaming from his competitors, the note Oppenheimer's Yair Reiner sent clients Friday morning was something of a buzz kill.
"We believe Apple could report in line to slightly disappointing [fiscal fourth quarter] revenue," he wrote, advising investors to hold off buying shares until after Monday's quarterly earning's report.
The focus of his concern: the iPhone.
Reiner's estimate for MOREPhilip Elmer-DeWitt - Oct 16, 2009 8:03 AM ET
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