NEW YORK ( TheStreet) -- Much has been made about Apple's ( AAPL) share price decline over the past few months, as the stock fell from $700 in September 2012 to below $400 just a few weeks ago. Is the stock, and the company itself, on its way to recovery? It is, if you believe one Wall Street pundit. Topeka Capital Markets analyst Brian White said he believes that Apple has a three-pronged approach towards a sustainable share price recovery: returning cash to shareholders; a profit cycle trough and move higher; and new areas of growth. White rates Apple "buy" with a $888 price target. Apple completed the first part of the recovery process when it announced earnings, raised its buyback program by $50 billion and lifted its dividend 15% per annum. In total, Apple will return $100 billion to shareholders over the next three years, way more than the $45 billion it initially announced in March 2012. Investors had been clamoring for Apple to return more cash to shareholders. Those investors include Greenlight Capital's David Einhorn, who spoke at the Ira Sohn Conference last week. CEO Tim Cook and his team were under pressure to deliver more to shareholders, and it's worked, with the stock up 13.6% since Apple's second-quarter earnings. The next phase of the recovery is a little more tricky, though it does appear as if it's playing out. Apple guided third-quarter revenue between $33.5 billion and $35.5 billion, with gross margins between 36% and 37%. That was well below what analysts were thinking, but recent data shows that Apple's earnings trough might be coming to an end. "Final April sales for our Apple Monitor rose by less than 1% MoM and better than the average decline of 1% over the past eight years," White penned in a note. "This outperformance follows two consecutive months of weaker than average seasonality." He also noted that Hon Hai Precision saw a 12% month-over-month increase in sales, much better than the 3% average decrease over the past three years. That suggests that Apple orders aren't as weak as initially thought, and perhaps Apple may have set the bar so low for the fiscal third quarter that it trounces them, and sets itself up for a return to growth in the fourth quarter and beyond.
The last part of the recovery is all about a return to what Apple's been about over the past 30-plus plus years: innovation and design. Apple has always made beautiful, aesthetically pleasing products, and packaged them together with great marketing and the ability to use them easily. These products "just work," as Steve Jobs once famously said at a conference. There's been much talk about where Apple will go with the brand, and who it partners with to sell more iDevices. On the earnings call, Cook hinted at where Apple could go down the line, even laying out a time frame, which is unusual for Apple. "Our teams are hard at work on some amazing new hardware, software, and services that we can't wait to introduce this fall and throughout 2014," Cook said in his prepared remarks. "We continue to be very confident in our future product plans." Apple has increasingly talked about new software and services, as it tries to change the line of thinking that it's simply a hardware company. It's not, as it generated more than $4 billion in software and services revenue last quarter, but that gets overshadowed by the enormous revenue from iPhones, iPads and other hardware. A revamped version of iTunes expanded into mobile payments could be the boost software and services needs, but analysts, including White, think Apple has more in the way of new hardware to entice consumers and investors alike. The oft-rumored iWatch could generate as much as $5 billion in revenue for Apple. There's also the long-awaited Apple TV, and the potential for a deal with China Mobile ( CHL) to really juice revenue and earnings. Apple is starting to turn the ship around, and setting the stage for a return to growth in 2014 and beyond. It appears the market has already started to price that in, as it waits for "one more thing." -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia