Is Apple Inc. (AAPL) a Buy After Earnings?

KGI Research estimates largely indicate that the company will release all of its next generation products in the third quarter of the year. I don’t necessarily agree with the assumed shipment figures, but it’s nice to get a basic idea on how the second half of 2013 might shape up.

Comparisons

Earlier in the year, Samsung had to lower guidance to $8.5 billion in operating profit versus the $8.8 billion in operating profit that analysts were estimating earlier. Because of this, the stock crashed in June.

Samsung is experiencing difficulties in the high-end. While the Samsung Galaxy S line-up of phones provides a viable alternative to the iPhone, the prevailing phone in the high-end remains the iPhone (especially in the United Sates).

Part of the difficulty that Google Inc (NASDAQ:GOOG) faces with its Android operating system is making sure that it operates as smoothly as possible. You’ll notice that between iOS and Android, iOS has a snappier feel to it. The Windows Phone 8 operating systems is similar to iOS in terms of snappiness. Younger teenagers in the United States are expected to make the switch to Apple Inc. (NASDAQ:AAPL) over the next two years.

Source: Piper Jaffray

Despite some of the weaknesses in the Android operating system, Google Inc (NASDAQ:GOOG) has still been able to make a fairly compelling operating system for the OEMs, what’s nice is that it’s also free. In the most recent quarter, Google Inc (NASDAQ:GOOG) was able to report 138% year-over-year revenue growth from the Android Play Store (approximate).

It seems that growth in the Android ecosystem is well on track. But it’s largely unbalanced. I believe that Samsung will generate net income growth in the future, but the sentiment around the stock is what’s keeping the valuation depressed.

Conclusion

Apple Inc. (NASDAQ:AAPL)’s earnings results were largely a hit. There a lot of opportunities for Apple to grow (new product releases, product refresh, and international opportunities). The downside has been margin compression, product cannibalization (tablets versus PC’s/Macs), and difficulties in China.

Google’s and Samsung’s stock should recover eventually, but anticipate lower rates of capital appreciation as the paradigm shifts from high growth to maturing rates of growth.

The article Is Apple a Buy After Earnings? originally appeared on Fool.com and is written by Alexander Cho.

Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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