Apple Routinely Posts Record-Breaking Sales, Yet Fails to Meet Wall Street Targets

There is no denying that this year was another incredibly successful and momentous one for Apple. The company posted record-breaking sales numbers across virtually all its product lineups, introduced the world’s fastest-selling smartphone in the iPhone 5, accumulated $36 billion in revenue in the third quarter and added a number of new products under its belt that should sell like hotcakes as the holiday shopping season begins. Yet, Wall Street analysts keep dragging the company back down to Earth, causing Apple stock to falter and lose over 20 percent in market cap since the iPhone 5 was introduced. Allow for Zack Epstein from BGR to explain:

As dominant as Apple is right now, Wall Street analysts continue to issue sky-high estimates that hammer the company when it can’t meet them. This is the game we play, of course, and while Apple’s stock soared when it was regularly beating estimates, it is now heading back down to Earth as analysts adjust by raising expectations even further.

As many times as Apple posts record-breaking sales, Wall Street analysts respond with even higher estimates that the company simply cannot reach. When Apple fails to meet these demanding expectations, investors flee and the stock drops. Apple is still the world’s most valuable company by a longshot and has momentum that none of its competitors can match, but Wall Street analysts need to be more realistic in their sales predictions and future outlooks on Apple. The recent executive shakeup within Apple and lackluster new Maps app might have been issues this year for the company, but I believe that next year should be another strong year for the folks in Cupertino.


Post a response / What do you think?