As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the consumer electronics industry, including Apple (NASDAQ: AAPL) and its peers.
Consumer electronics companies aim to address the evolving leisure and entertainment needs of consumers, who are increasingly familiar with technology in everyday life. Whether it’s speakers for the home or specialized cameras to document everything from a surfing session to a wedding reception, these businesses are trying to provide innovative, high-quality products that are both useful and cool to own. Adding to the degree of difficulty for these companies is technological change, where the latest smartphone could disintermediate a whole category of consumer electronics. Companies that successfully serve customers and innovate can enjoy high customer loyalty and pricing power, while those that struggle with these may go the way of the VHS tape.
The 4 consumer electronics stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.7%.
Luckily, consumer electronics stocks have performed well with share prices up 10.7% on average since the latest earnings results.
Apple (NASDAQ: AAPL)
Creator of the iPhone and App Store, Apple (NASDAQ: AAPL) is a legendary developer of consumer electronics and software.
Apple reported revenues of $95.36 billion, up 5.1% year on year. This print exceeded analysts’ expectations by 0.7%. Overall, it was a satisfactory quarter for the company with We were also happy its revenue narrowly outperformed Wall Street’s estimates, and the beat in Products was a bright spot.
“Today Apple is reporting strong quarterly results, including double-digit growth in Services,” said Tim Cook, Apple’s CEO.
Apple achieved the fastest revenue growth of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $213.55.
Is now the time to buy Apple? Access our full analysis of the earnings results here, it’s free.
Best Q1: GoPro (NASDAQ: GPRO)
Known for sponsoring extreme athletes, GoPro (NASDAQ: GPRO) is a camera company known for its POV videos and editing software.
GoPro reported revenues of $134.3 million, down 13.6% year on year, outperforming analysts’ expectations by 7.8%. The business had a strong quarter with a decent beat of analysts’ EBITDA estimates.
GoPro delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 21.8% since reporting. It currently trades at $0.74.
Is now the time to buy GoPro? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Peloton (NASDAQ: PTON)
Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.
Peloton reported revenues of $624 million, down 13.1% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ EPS estimates.
Peloton delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 4.9% since the results and currently trades at $6.64.
Read our full analysis of Peloton’s results here.
Sonos (NASDAQ: SONO)
A pioneer in connected home audio systems, Sonos (NASDAQ: SONO) offers a range of premium wireless speakers and sound systems.
Sonos reported revenues of $259.8 million, up 2.8% year on year. This number topped analysts’ expectations by 1.8%. It was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 25.5% since reporting and currently trades at $11.24.
Read our full, actionable report on Sonos here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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