Apple (AAPL) shocked Wall Street with an unusual earnings miss on Thursday.
But LikeFolio Earnings Season Pass members weren’t surprised at all… In fact, the earnings trade idea we sent to members on AAPL could have returned a 100% profit — in just five days!
So how did we know that Apple was likely to underperform expectations?
As usual, we followed the consumer data.
Apple is a monster
In its third quarter of 2021, the company generated more than $81 billion in revenue, a quarter record.
Its services segment grew by +33% YoY, now composing more than 20% of the company’s revenue.
At LikeFolio, we’ve witnessed tremendous demand growth in devices like iPads and Macs, the workhorses of the working-and-learning-from-home shift we witnessed over the last year and a half.
But now, Apple is experiencing a slowdown in demand growth, as represented by the green line on the chart below:
So we broke Apple’s segments down for members as we prepared for the earnings call.
This is what we found:
The Bad News…
- Consumer demand for the iPhone 13 lineup lags 2020 levels: -19% YoY.
- Overall demand for AAPL products shows short-term slack.
The Good News…
- Apple is gaining more loyalists: Upgrade mentions remain consistent, and more consumers report switching to an iPhone device versus 2020: +5% YoY. Meanwhile, “switching to an Android” mentions are falling.
- Happiness is rising for key Apple products, namely the iPhone, Mac, and iPad.
- For Apple consumers who DID purchase a new iPhone device, the majority opted for the most expensive version.
- While Apple service usage mentions remain above 2019 levels, these mentions have tempered versus 2020. Will these gain steam as more devices land in consumer hands?
What does this all mean?
The overwhelming slowdown in demand growth translated to a Bearish Earnings Score for Apple (-58) — so we suggested playing AAPL’s earnings report to the downside, short-term.
And it paid off. Big.
The “System Trade” that was recommended to members of Earnings Season Pass could have produced profits of 100% or more… in just five trading days.
But you know what’s even more exciting than making 100% profit in five days?
Knowing you’ll have another chance to do it again tomorrow.
We’re currently putting the finishing touches on another Earnings Season Pass issue for next week that will contain more than 20 opportunities to profit big from company earnings reports in just five days. All because of the consumer data!