I want to drop a quick note about my analysis published in MarketWatch this week on Apple. The company has released all iPhone 11 models simultaneously this year, so there’s a chance they do well short-term. Longer term, releasing all models is very likely to negatively impact Apple in future quarters.
I struggle to see why Apple is trading higher than its peak in 2018. Even with an earnings beat, we will see a decline in overall revenue YoY. We are seeing double digit declines in Apple’s top revenue segment, the iPhone. The effects of smartphone saturation will be even more evident when consumer confidence dips. This is why Samsung is seeing 50% lower operating margins – consumer confidence in China is at a 2-year low and pricing wars are driving prices down (a major warning sign of saturation). Apple has followed by lowering prices.
Regardless, with or without an earnings beat, Apple’s annual revenue will be lower this year than last year. Any other tech company would experience a major sell-off if reporting lower YoY revenue.
Apple has a lot of cash, but to expect a synchronistic handoff between services (or any other pivot) and the iPhone is overly optimistic.
You can read the MarketWatch article in full here: https://www.marketwatch.com/story/investors-arent-noticing-apples-long-slow-decline-2019-10-29
Regarding Lyft, this company is able to report cleaner numbers than Uber. I am very bearish heading into Uber’s lock-up expiration and will personally be betting against both companies again. I have half my position in now, and will lock-in the remaining half of my short position after Lyft reports in the event we see an increase in price from Lyft’s earnings. This will be round four for me on these shorts.