Investment Thesis
Apple demonstrates exceptional financial fundamentals with industry-leading profitability (48.6% gross margin, 28.1% net margin), outstanding capital efficiency (67.3% ROE), and robust cash generation ($78.3B free cash flow). Earnings growth of 19.5% significantly outpaces revenue growth of 6.4%, indicating strong operational leverage and efficiency gains despite mature market conditions.
Strengths
- Exceptional gross margin of 48.6% and net margin of 28.1% demonstrate pricing power and operational excellence
- Outstanding cash generation with $78.3B free cash flow and 30.7% FCF margin; operating cash flow covers capex 19x over
- Net income growth of 19.5% YoY far exceeds revenue growth of 6.4%, revealing strong operational leverage
- Exceptional capital efficiency with ROE of 67.3% and ROA of 19.3%
- Manageable debt structure with 22.1x interest coverage ratio despite net debt position
Risks
- Revenue growth of 6.4% is moderate, suggesting mature markets and potential saturation in core segments
- Current ratio of 1.07x and quick ratio of 1.02x are tight, though mitigated by exceptional cash generation
- Net debt position of $37.1B ($82.7B debt minus $45.6B cash) requires ongoing cash generation for serviceability
- 14 Form 4 insider filings in 90 days warrant monitoring for insider activity patterns
Key Metrics to Watch
- Operating cash flow and free cash flow trends year-over-year
- Gross margin sustainability amid competitive and cost pressures
- Revenue growth rate trajectory and geographic/segment diversification
- Return on equity and return on assets consistency
- Debt-to-equity ratio and net debt reduction pace
Financial Metrics
Revenue
254.9B
Net Income
71.7B
EPS (Diluted)
$4.85
Free Cash Flow
78.3B
Total Assets
371.1B
Cash
45.6B
Profitability Ratios
Gross Margin
48.6%
Operating Margin
34.0%
Net Margin
28.1%
ROE
67.3%
ROA
19.3%
FCF Margin
30.7%
Balance Sheet & Liquidity
Current Ratio
1.07x
Quick Ratio
1.02x
Debt/Equity
0.78x
Debt/Assets
71.3%
Interest Coverage
22.05x
Long-term Debt
82.7B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T16:47:01.208457 |
Data as of: 2026-03-28 |
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