Apple (AAPL) Stock Reiterated As A 'Buy' By TheStreet Ratings Team

NEW YORK (TheStreet) --TheStreet Ratings team reiterates Apple Inc.  (AAPL) as a "buy" with a ratings score of B+.

Shares of Apple are up 0.86% to $640.83 on Friday. 

TheStreet Ratings Team has this to say about their recommendation:

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"We rate Apple Inc a 'buy.' This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AAPL's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 4.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AAPL's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 43.45% is the gross profit margin for APPLE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.39% is above that of the industry average.
  • Net operating cash flow has slightly increased to $13,538.00 million or 8.26% when compared to the same quarter last year. In addition, APPLE INC has also modestly surpassed the industry average cash flow growth rate of 7.77%.
  • You can view the full analysis from the report here: AAPL Ratings Report
Separately, Goldman Sachs increased its price target on Apple to $720 from $635, while  Argus Research maintained its "buy" rating on the stock and raised its price target to $700 from $610.

New speculation regarding the iPhone 6, due out this fall, has surfaced with reports of a leaked photo of the phone. The image shows the back of a green iPhone case with a cut out Apple symbol and appears to fit a 4.7 inch screen, according to Business Insider

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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