Finimize - 🧹 Apple gets a clean sweep

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Today's big stories

Apple's quarterly earnings came in better than expected, and none of its products let the tech giant down
Peloton’s had a bad year, but that might make now the perfect moment to buy in – Read Now
Tesla reported better-than-expected results, even though its cybertruck is nowhere to be seen

Transaction Stations

What’s Going On Here?

Apple reported better-than-expected results late on Thursday, so at least the tech giant will be able to foot the bill for its fancy new payments service.

What Does This Mean?

Apple’s fourth quarter is always an important one, not least because it reflects sales during the all-important holiday period. Well, those last-minute spending sprees went down a treat: iPhone sales – the company’s biggest money-spinner – were up by a better-than-expected 9% versus the same time in 2020. In fact, sales of almost every one of Apple’s products grew from the year before, despite the supply chain problems. And then there’s its highly profitable services segment: revenue from the home of Apple TV, iCloud, and Apple Music climbed by a better-than-expected 24%, which helped bring in a record total revenue of $124 billion.

Why Should I Care?

Zooming in: The smartphone market is shrinking.
All this growth had plenty to do with China: data out earlier this week showed that Apple became the biggest smartphone seller in the country for the first time in six years last quarter. The tech giant boosted its Chinese sales by a third, helping it claim a record 23% of the country’s smartphone market even as that market shrank. That’s a trend Apple might want to get used to: analysts expect rising prices, shortage-stunted supply, and consumers’ increasing tendency to delay phone upgrades to drag on smartphone sales across the world.

The bigger picture: Pay Apple.
Apple’s got a few tricks up its turtleneck to offset that potential slowdown, including pushing further into the payments space. Business owners currently need to use their iPhone alongside a payment machine to process transactions, but Apple’s reportedly planning a new service that would let them use – you guessed it – just the iPhone. That’s worrying news for major payment providers like Block that could see demand for their terminals drop off, which might be why investors sent the company’s shares down after the announcement.

You might also like: Is Apple worth its trillion dollar-plus valuation?

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Analyst Take

Peloton Might Finally Be Going Places

Andrew, Analyst

What’s Going On Here?

Peloton’s investors have endured a tough workout over the past year.

The at-home fitness company’s stock has slipped 85% in that time, closing at $24.75 on Wednesday – almost side by side with its price two and a half years ago.

Those difficulties mostly come from its imbalance of equipment sales – which make up about 80% of its revenue – and subscription fees for its suite of online workouts.

Because while profit margins on that smaller chunk of subscription revenue have been growing, margins on its hardware have been narrowing as the company cuts prices.

But here’s the thing: Peloton’s growing revenue has pulled down its valuation to reasonable levels, and some Wall Street analysts are suddenly shifting their positions from “hold” to “buy”.

So that’s today’s Insight: why the worst might be behind Peloton, and whether now’s the moment to buy in.

Read or listen to the Insight here

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