Infinite Loop / The Apple Ecosystem

Analysts reaffirm NPD figures no cause for AAPL alarm

After several analyst reports caused Apple's stock price to fall by several …

In case you don't follow Apple's stock price closely, the latter part of last week wasn't exactly kind to AAPL. On Thursday, shares of Apple's stock fell a little over three points as analyst reports caused a bit of panic among shareholders. Following the sell-off, Neddham & Co. analysts Charlie Wolf and Jim Lewellis issued their own research note, in which they recommend investors buy the stock, saying that the price drop and research reports aren't anything to worry about.

Most of Thursday's report was based on the new NPD numbers that predicted slight sales decreases for the current quarter. In their report, the Needham analysts specifically refer to the sell-off as an "overreaction," and offer a variety of reasons for why that's the case. For one thing, the NPD numbers are only based on one month's worth of sales, so there's still a lot of the second (fiscal) quarter left to go. The NPD figures also only include US. sales, which are only about half of Apple's total sales.

Wolf and Lewellis also note that Apple's own revenue estimate included a 12 percent decrease, so a six percent drop in Mac sales for the first month of the quarter isn't a big deal. The analysts also note that Apple has plenty of deferred revenue in the bank thanks to the iPhone, meaning that the company's revenues going forward will be insulated from the recession a bit as more iPhone revenues are recognized. Ultimately, the Needham crew is expecting $7.9 billion in revenue, a five percent increase from Q2 2008, and also suggest buying the stock after the Thursday sell-off brought the price down a bit.

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