Large U.S. corporations, including Microsoft (MSFT), Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), Facebook (FB) (now Meta), and Tesla (TSLA), have reported their quarterly earnings. While Microsoft, Google, and Tesla zoomed past estimates, Apple, Meta, and Amazon disappointed.
Though these companies may not have solid quarterly performance in common, they are under a lot of scrutiny due to their global operations and large scale. Further, geopolitical events, complex international laws, and economic cycles directly hurt their brand image, financials, and operating conditions.
Thus, it is prudent to keep an eye on the evolving risk factors of these corporations, as ascertaining risks ahead of investing enhances the odds of winning in the market.
Using the TipRanks’ new and dynamic Risk Factors tool and looking at the risk distribution profile of these companies, it is clear that Apple is the only company, among the above-mentioned companies, that has added two new risks post its recent quarterly earnings.
Highlighting the increased scrutiny on the technology sector, Apple, in a recent SEC filing, stated that it is subject to “intense media, political and regulatory scrutiny, which exposes the Company to increasing regulation, government investigations, legal actions and penalties.” Further, this may harm its brand reputation.
Additionally, under its Sales & Marketing sub-category, Apple stated that its failure to offer appealing digital content to its customers could negatively impact its financial and operating performances.
It is worth noting that Apple offers a variety of digital content through its app store and subscription-based services. Further, it launched a personalized fitness service, including Apple Fitness.
During the Q4 conference call, Apple’s CFO Luca Maestri stated that the company is seeing “increased customer engagement” for its services. Further, the paid accounts on its digital content stores marked double-digit growth and reached an all-time high during Q4 in each geographic segment.
Noting the strong growth in its paid subscriptions, Maestri stated that Apple now has over “745 million paid subscriptions across the services on our platform,” up 160 million year-over-year.
Overall, Apple’s risk distribution profile indicates that factors including its Ability to Sell, Production, and Macro & Political place it in a higher risk zone. All these risk factors are well above the sector benchmark.
However, its Legal & Regulatory, Tech & Innovation, and Finance & Corporate risks are well below the sector benchmark.
Meanwhile, on TipRanks, Apple stock has a rating consensus of Strong Buy, based on 19 Buys and 6 Holds. Additionally, Apple scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that it will likely outperform the market.
The average Apple price target of $168.91 implies 12.8% upside potential to current levels.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
Remember when Tesla (TSLA) was having a difficult 2021? Well, those days are long gone now. The EV leader’s past week has been marked by the stock surging to continuous new highs boosted by positive headlines.
First came a blistering Q3 beat, followed by Hertz announcing it would order 100,000 Tesla vehicles by the end of next year.
Hertz was once again the catalyst for further share gains when on Wednesday it became known the car rental company has struck a deal with Uber to supply the ride hailing service with 50,000 Tesla vehicles for drivers to rent. Beginning on November 1, Uber drivers will be able to rent Teslas in a number of cities including LA, SF, Washington DC, and San Diego.
“With the flagship Hertz deal earlier this week kicking it off, this Uber partnership is the largest expansion of EVs on a mobility platform in North America,” said Wedbush analyst Daniel Ives. “We believe this starts to lay the groundwork for the long awaited robotaxi network over the next decade from Tesla with the Uber/Hertz partnership planting the seeds for where this is all directionally heading in our opinion.”
With the expansion into both ridesharing and car rentals, Ives is no doubt the latest developments “massively expand Tesla's and EVs overall addressable TAM.”
The next item to tick off on Tesla’s to-do list, according to Ives, should be to make the company’s FSD (full self-driving) feature “ready for safe deployment.” It’s no pipedream for the company make robotaxis a reality over the next 2-3 years, the 5-star analyst claims.
While currently EVs account for just 2% of all vehicles in the US, given the “rapid electrification” exhibited at such auto luminaries as GM and Ford, by 2025, Ives expects this figure will “approach and potentially exceed” 10%. The 5-star analyst counts the Hertz deal as nothing less than a “tipping point for EV adoption,” and expects other bulk deals will follow.
So great news for the fledgling EV industry, but what does it all mean for TSLA investors? Going by Ives’ $1,100 price target, the analyst expects shares to stay range bound for now (To watch Ives’ track record, click here)
The rest of the Street strikes a more cautious tone; while 11 analysts are positive on TSLA’s prospects, with 6 additional Holds and Sells, each, the consensus is that Tesla stock is a Hold. Most consider the shares overvalued; the $836.50 average price target suggests shares will slide ~24% over the one-year timeframe. (See Tesla stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.