Market News

Are You Aware of These Risks to Your Apple Stock?

Shares of iPhone maker Apple (NASDAQ:AAPL) have dropped 17% so far this year and the company has been seeing a variety of challenges recently.

Yesterday, Apple Cash faced issues with some users being unable to transfer funds. Foxconn, the company’s supplier in China, saw protests from workers yesterday. The protests were sparked by strict COVID-19 restrictions at its China plant and a delay in bonus payments.

In another development, the U.K.’s Competition and Markets Authority has launched an investigation into Apple, accusing it of dominating the mobile browser market.

At such a juncture, the TipRanks Risk Factors tool comes to the rescue, providing an in-depth look at potential risks a company may face.

Our data dive indicates a total of 29 risks for Apple stock (according to its latest third-quarter filings) with nearly half the contribution coming from the Legal & Regulatory and Ability to Sell risk categories.

As the COVID-19 pandemic continues to rage in China, Apple faces a key Macro & Political risk. The company has stated that its business, results of operations, financials as well as stock price have seen an adverse impact from the pandemic and could see a material impact in the future as well.

Moreover, it added, “During the course of the pandemic, certain of its component suppliers and manufacturing and logistical service providers have experienced disruptions, resulting in supply shortages that affected sales worldwide, and similar disruptions could occur  in the future.”

Additionally, under a new risk in the Legal & Regulatory category, Apple has noted that meeting “Evolving and various stakeholder expectations and standards could result in legal and regulatory proceedings against the company and materially adversely affect its business, reputation, results of operations, financial condition, and stock price.”

AT present, compared to a sector average of 10.9% of risks stemming from Production, Apple faces higher risks at 17.2%.

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