Apple shares hit an all-time high Monday following news that the tech giant sold more than 300,000 iPads Saturday, in its first day available at retail. Is there more room to run for the tech stock? Toni Sacconaghi, senior research analyst at Sanford C. Bernstein, shared his insights.
“These are early days—the iPhone only sold about 6 million units in its first year and this is a new category. It will take time to evolve,” Sacconaghi told CNBC.
“It’s important to understand that iPad’s contribution near-term to Apple’s financials are pretty small—we estimate that every 1 million iPads sold will generate less than 1 cent in earnings and Apple’s going to do about $12 earnings this year,” he said.
Nevertheless, Sacconaghi has an “outperform” rating on the stock and expects Apple to sell 5 million iPads in the first year.
“When looking in terms of cash generative powers, Apple remains attractively valued at current levels. And the iPhone continues to be the dominant driver or earnings and remains on a very steep trajectory,” he said.
- Watch Sacconaghi's Previous Appearance on CNBC (Jan. 25, 2010)
More iPad Buzz:
- iPad to 'Cannibalize' Netbook Sales: Oppenheimer Analyst
- Apple's iPad Sales Spur Outlook for Stock, Earnings
- With Apple's iPad Comes a New Gaming Explosion
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Apple iPad's Competitors:
Sanford C. Bernstein owns shares of AAPL. Sacconaghi has investment banking clients who own shares of AAPL.
Apple is or during the past 12 months, a client of Bernstein, which provided non-investment banking securities related services and received compensation for such services.