Wall Street is worried that Apple’s rotten quarter is about to get worse.
With the stock down 30 percent in little more than three months, investors fret that the former tech darling will post a miss when it releases results later this week.
Apple’s stock has fallen as low as $498.51 from a high of $702.10 in September, wiping out some $200 billion in market value. If Apple’s earnings for the crucial holiday quarter come up short on Wednesday, the shares could fall even lower.
“The size of the miss will mean the difference between a $400 and a $600 stock,” said analyst Trip Chowdhry of Global Equities Research. “There are a lot of people who think Apple is a broken stock.”
Cracks are starting to show at the once impenetrable company. A flawed mobile maps service, a lull in innovation, excess spending on new products and smaller profit margins have weighed on the stock.
Most troubling are signs that consumers aren’t clamoring for Apple’s new gadgets like they once did, fueled by reports that the company has been cutting orders for iPhone parts.
Some analysts think the selloff is overblown, and most Apple watchers still value the stock well above its current levels.
Colin Gillis of BGC Partners isn’t as pessimistic in his Apple quarterly forecast as some of his peers, but he values Apple at a conservative $575 a share.
“While the December holiday quarter is expected to smash records, we are concerned that the demand lifespan for new Apple products is compressing,” Gillis wrote in a note to clients.
Apple could post its first earnings decline in almost a decade. Despite soaring iPhone sales, Wall Street predicts earnings per share will be down for the first time in years, falling to $13.34 from $13.87 a year ago.