NEW YORK (TheStreet) -- Shares of Apple (AAPL) were falling 1.1% to $111.25 Wednesday after news of a lawsuit over storage space in iOS 8 and analyst predictions that iPad sales will be down for the first time in 2014.
Two Florida men filed a lawsuit against the iPhone maker, saying it misleads users about the amount of storage space iOS 8 uses in iPhones, iPads, and iPod touches, according to Bloomberg. The lawsuit says that "as much as 23.1%" of the advertised storage space of iOS devices is taken up by iOS 8.
The plaintiffs in the lawsuit claim that Apple attempts to sell users iCloud subscriptions which offer cloud storage "in a desperate moment" when they run out of space on their devices.
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In 2012, Apple won a case in which users complained that it misled consumers about the amount of storage space available in its iPods, according to SiliconBeat.
Earlier on Wednesday, analyst firm ABI Research said that it expects Apple's iPad sales to decrease in calendar 2014 compared to 2013, which would be the first sales decline for the tablet since its introduction in 2010.
TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and expanding profit margins. 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:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 38.11% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAPL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- APPLE INC has improved earnings per share by 20.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, APPLE INC increased its bottom line by earning $6.43 versus $5.66 in the prior year. This year, the market expects an improvement in earnings ($7.74 versus $6.43).
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.5%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
- 42.68% 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 20.10% is above that of the industry average.
- You can view the full analysis from the report here: AAPL Ratings Report