The shares of Apple Inc. (NASDAQ:AAPL) and Altaba Inc. (NASDAQ:AABA) were among the active stocks of the last trading sessions. Apple Inc. (NASDAQ:AAPL) soared to 0.07% closing at the price of $207.25 whereas the shares of Altaba Inc. (NASDAQ:AABA) declined -0.71% with the decrease of -0.51 points closing at the price of $70.99. Apple Inc. has currently increase 29.9% in its stock over the period of 6-months while its rival Altaba Inc. subtracted -1.62% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money, The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Apple Inc. (NASDAQ:AAPL) is 18.3% while the ROI of Altaba Inc. (NASDAQ:AABA) is 8.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AAPL’s EBITDA Margin is 13.29 whereas AABA’s is 9008.08.
Both the profitability ratios suggest a mixed sentiment for Apple Inc. (NASDAQ:AAPL) and Altaba Inc. (NASDAQ:AABA).
EPS & Surprise Factor
Apple Inc. (NASDAQ:AAPL) reported $2.34/share EPS for the previous quarter where analysts were predicting an EPS to be $2.18/share Thus beating the analyst Estimates with a Surprise Factor of 7.3 Percent. While, Altaba Inc. (NASDAQ:AABA) reported EPS of $0.18/share in the last quarter. The analysts projected EPS of $0.14/share depicting a Surprise of 28.6 Percent.
Taking a look at Earnings per Share, Altaba Inc. tends to be beating the analyst estimates more than Apple Inc.. so AABA is more profitable than AAPL.
Technical Analysis of Apple Inc. & Altaba Inc.
Moving average convergence divergence (MACD) shows that Apple Inc. (NASDAQ:AAPL) is on a PRICE RELATIVITY trend While Altaba Inc. (NASDAQ:AABA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Apple Inc. was in BULLISH territory and Altaba Inc. was in BEARISH territory.
AAPL’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While AABA’s candle is BEARISH with MEDIUM.
EPS Growth Rate: AAPL’s 12.78% versus AABA’s -0.83%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Apple Inc. (NASDAQ:AAPL) is predicted at 12.78% while Altaba Inc. (NASDAQ:AABA) stands at -0.83%. These numbers suggest that AAPL is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of AAPL stands at 1.3 while AABA is at 0 whereas the debt ratio of the prior is 1 while the debt ratio of the later is 0.07.
The values of the both ratios suggest that AAPL is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2 for AAPL and 2.7 for AABA which means AAPL has Buy rating whereas AABA has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for AAPL is $214.69 which is 3.47% of its current price while AABA has price target of 88 which is 19.33% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
AAPL currently has price to earning P/E ratio of 17.98 whereas AABA has 44.4 while the forward P/E ratio for the prior stands at 15.33 and for the later it depicts the value of 0.
The price to Book P/B for AAPL is 8.8, Price to Sale is at 3.87 and for AABA these ratios stand at 0.94 and 1089.97.