Apple Inc. (AAPL) Stock Analysis
Apple Inc. (AAPL) Stock Analysis
Analysis from 10-K filed 2025-10-31. Data as of Q4 2025.
Overall Grade: F (Concerning)
Apple Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 69.6% | Above industry average |
| FCF Margin | 28.3% | Strong cash generation |
| Debt/Equity | 1.0x | Moderate leverage |
Investment Thesis: Strong return on invested capital of 69.6% suggests durable competitive advantages and efficient capital allocation.
Explore Apple Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Apple Inc. earns 69.6% ROIC, Top 5% in Technology
Apple Inc.'s trailing-twelve-month ROIC of 69.6% ranks Top 5% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 27.0% combined with asset turnover of 1.3x. Source: 10-K filed 2025-10-31. Gross margin of 47.3% with operating margin at 32.4% reflects strong pricing power.
| Metric | AAPL | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 69.6% | Excellent | Above sector median of 5.2% |
| Return on Equity (ROE) | 166.0% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 47.3% | Good | Strong pricing power |
| Operating Margin | 32.4% | Excellent | Efficient operations |
Cash Flow: Apple Inc. generates $123.3B FCF at 28.3% margin, positive NaN/8 quarters
Apple Inc. generated $123.3B in free cash flow (TTM), a 28.3% FCF margin, a margin that ranks Top 25% in Technology. Operating cash flow exceeds net income by 1.2x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-K filed 2025-10-31.
| Metric | AAPL | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 28.3% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $123.3B | Good | Positive cash generation |
| OCF/Net Income | 1.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Apple Inc. at 1.0x leverage
Apple Inc.'s debt-to-equity ratio of 1.0x reflects elevated leverage. Total debt of $90.5B offset by $66.9B in cash. Source: 10-K filed 2025-10-31.
| Metric | AAPL | Rating | Context |
|---|---|---|---|
| Debt to Equity | 1.0x | Adequate | Moderate leverage |
| Net Cash Position | $-23.6B | Warning | Net debt position |
Valuation: Apple Inc. trades at 34.5x earnings
Apple Inc. trades at a P/E of 34.5x. Free cash flow yield of 3.0% reflects market expectations for growth.
| Metric | AAPL | Rating | Context |
|---|---|---|---|
| P/E Ratio | 34.5x | Adequate | Premium valuation |
| EV/Sales | 9.4x | Adequate | Growth premium priced in |
| FCF Yield | 3.0% | Adequate | Lower cash yield |
| Dividend Yield | 0.4% | Adequate | Growth focus over income |
Capital Allocation: Apple Inc. returns 2.6% shareholder yield
Apple Inc.'s total shareholder yield is 2.6% (dividends 0.4% + buybacks 2.3%). Source: 10-K filed 2025-10-31.
| Metric | AAPL | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 2.6% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 2.3% | Adequate | Active share repurchases |
| Total Capital Returned (TTM) | $107.3B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 69.6% | Top 5% | 13.3x above |
| Free Cash Flow Margin | 28.3% | Top 25% | 3.1x above |
| Gross Margin | 47.3% | Bottom 50% | 0.9x below |
| Operating Margin | 32.4% | Top 10% | 6.7x above |
| Return on Equity (ROE) | 166.0% | Top 5% | 33.9x above |
| P/E Ratio | 34.5x | N/A | - |
Financial Scorecard
| Metric | AAPL | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 69.6% | Excellent | Top 5% of sector (median: 5.2%) |
| Free Cash Flow Margin | 28.3% | Excellent | Top 25% of sector (median: 9.1%) |
| Gross Margin | 47.3% | Good | Bottom 50% of sector (median: 51.6%) |
| Debt to Equity Ratio | 102.6% | Adequate | Elevated but manageable |
| P/E Ratio (Price-to-Earnings) | 34.5x | Adequate | Growth premium |
| Free Cash Flow Yield | 3.0% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is Apple Inc.'s Return on Invested Capital (ROIC)?
Apple Inc. (AAPL) has a trailing twelve-month Return on Invested Capital (ROIC) of 69.6%. This compares above the sector median of 5.2%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is Apple Inc.'s Free Cash Flow Margin?
Apple Inc. (AAPL) has a free cash flow margin of 28.3%, generating $123.3 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Apple Inc. stock overvalued or undervalued?
Apple Inc. (AAPL) trades at a P/E ratio of 34.5x, which is above the sector median of N/A. The EV/Sales multiple is 9.4x. Free cash flow yield is 3.0%, which is in line with market averages.
Q: Does Apple Inc. pay a dividend?
Apple Inc. (AAPL) currently pays a dividend yield of 0.4%. Including share buybacks, the total shareholder yield is 2.6%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does Apple Inc. have?
Apple Inc. (AAPL) has a debt-to-equity ratio of 1.0x with total debt of $90.5 billion. Net debt position is $23.6 billion.
Q: What is Apple Inc.'s revenue and earnings growth?
Apple Inc. (AAPL) grew revenue by 10.1% year-over-year. Earnings per share increased by 25.4% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: Is Apple Inc. buying back stock?
Apple Inc. (AAPL) repurchased $91.8 billion of stock over the trailing twelve months. This represents a buyback yield of 2.3%.
Q: How does Apple Inc. compare to competitors in Technology?
Compared to other companies in Technology, Apple Inc. (AAPL) shows: ROIC of 69.6% is above the sector median of 5.2% (Top 0%). FCF margin of 28.3% exceeds the sector median of 9.1% (Top 14% of sector). Gross margin at 47.3% is 4.3 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with Apple Inc.?
Apple Inc. (AAPL) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-K filed 2025-10-31. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.