Apple Jumps on Foldable Phone Reveal With Quality Grade at C

• Our read: EasyAlpha grades AAPL a C, indicating average quality relative to industry peers, where standout profitability balances rich valuation.
• The day: The shares gained 3.6% to close at $326.57 following the debut of the foldable iPhone Duo.
• Watching: Quarterly financial results scheduled for Thursday, October 29.

Apple shares jumped on Thursday, marking the stock's largest daily gain since Friday, July 31 on trading volume of 1.7x the 20-session average. The rally followed the company's annual fall product event, where the company unveiled the iPhone Duo, a foldable smartphone starting at $1,999. The showcase also included updates to the Apple Watch lineup.

Market commentary showed that Wall Street welcomed the foldable launch, expecting early demand from existing device owners upgrading. Even so, analysts highlighted that the company is walking a tightrope on pricing across the new device lineup. Commentary also pointed to potential margin pressure following the product unveilings.

Underneath the product excitement, Apple's business fundamentals remain robust. The company generated quarterly revenue growth of +16.4% year over year, supported by a profit margin of 27.6% and a return on equity of 148.8%. These figures highlight profitability as the company's primary financial strength. Companies graded A or B have stronger fundamentals, and historically they have carried a lower risk of large drawdowns than companies graded D or E.

Valuation is the primary watch item in Apple's file. Shares trade at 36.2 times trailing earnings and 32.7 times forward projections, while the stock sits 5.1% below its 52-week high of $344.27. Following Thursday's sharp move, the price closed 0.8% above the average analyst price target of $323.86.