Analysts Think These 5 Stocks Are Overvalued

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 120

On November 4, The Satori Fund’s Dan Niles called Apple Inc. (NASDAQ:AAPL) “the most overpriced tech stock”, reasoning that its growth as a big-cap tech stock relative to its multiples does not make sense. In Q3 2021, Apple Inc. (NASDAQ:AAPL)’s 5-year compounded revenue growth came in at roughly 11%, whereas other mega-cap tech companies like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN) reported revenue growth of 15%, 23%, and 28% over the period, respectively. 

Apple Inc. (NASDAQ:AAPL) declared on January 27 a $0.22 per share quarterly dividend, in line with previous. The dividend will be paid on February 10, to shareholders of record on February 7. 

Apple Inc. (NASDAQ:AAPL) published its Q4 results on January 27, posting earnings per share of $2.10, beating estimates by $0.21. The revenue jumped 11.22% from the prior-year quarter to roughly $124 billion, surpassing estimates by $5.41 billion. 

Credit Suisse analyst Sami Badri raised the price target on Apple Inc. (NASDAQ:AAPL) on January 31 to $168 from $150 and kept a Neutral rating on the shares. The analyst noted that Apple Inc. (NASDAQ:AAPL)’s Q4 revenue of $123.9 billion came in ahead versus Street consensus, despite supply constraints that were worse than Q3, while EPS of $2.10 was also above consensus of $1.90. Q1 2022 should set a March-quarter revenue record whilst supply remains constrained, Badri added, but he pointed that growth should decelerate on tough comparisons.

Hedge fund sentiment decreased around Apple Inc. (NASDAQ:AAPL) in Q3 2021. Insider Monkey’s third quarter database suggested that 120 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), down from 138 funds in the preceding quarter. Berkshire Hathaway is the leading stakeholder of the company, with more than 887 million shares worth $125.5 billion. 

Here is what Alger Spectra Fund has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:

“Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives tight engagement with consumers and enterprises, fostering the growing purchases of high-margin services like music, apps and Apple Pay. Apple’s quarterly earnings exceeded street estimates on strong margin realization driven by a sales mix of more profitable services. The margin strength was even more impressive given significantly higher freight costs and supply constraints that prevented approximately $6 billion in revenue realization.”