Apple (AAPL) is one of the "Magnificent Seven" stocks — a top performer in 2023 with shares up 55% year-to-date — but Barclays Senior Analyst Tim Long is staying on the sidelines.

Speaking with Yahoo Finance's Seana Smith at the Barclays Global Technology Conference, Long said he 'struggles' with Apple's multiple and valuation.

"Apple has basically lowered guidance four quarters in a row...the stock doesn't operate in line with fundamentals," Long added.

Long also pointed to sluggish iPhone 15 sales while warning of "another year of weakness on the hardware side" if macroeconomic conditions remain challenged.

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

SEANA SMITH: And, Tim, another name that I know our audience is very familiar with, and it's a favorite among investors, not one of yours, though. And that's Apple. You have had a neutral rating on the stock now for quite some time.

TIM LONG: Yes.

SEANA SMITH: Why are you a bit bearish?

TIM LONG: Yeah. So Apple's a very tricky one. We're in a period now where the fundamentals are not good. They've basically lowered guidance maybe four quarters in a row. They don't supply official guidance, but numbers have come down for four quarters in a row. And the stock's up, whatever, 30% or 40% this year.

So it's not always one as a stock that operates in line with fundamentals. And we struggle with the multiple and the valuation on it. I mean, this-- before five, six years ago, this was pretty steadily a mid-teens, multiple stock. And then after a two-year period, it was a 30 multiple stock. I don't know what really changed.

So we still see weakness in iPhone 15. We were just in Asia. It sounds like the 16, next year's version, is going to be much of the same, nothing too different in it, which means, if we're still in a rough macro environment, it could be another year of weakness on the hardware side.

Story continues

And then we always identify services as a great business, but there's some really big risks there. And obviously, there's this Google Department of Justice case, where there's a very large revenue stream coming in to Apple to be the default browser. And that's potentially at risk now. There's a lot of risks around the App Store being investigated or in about 15 different countries. So a lot of risk to the high multiple part of that business as well.

SEANA SMITH: Going back to what you said about the iPhone 15 and now looking at the 16, but 15. From your checks, what does demand look like?

TIM LONG: It's fallen. We-- some of the markets like China was an important market where Apple was growing double digits in the first half of the year. And then that turned down to two double digit declines the last few months now. So demand is not great. What we saw through COVID for a number of their product lines was just a rapid acceleration of unit growth. So the useful life, if you will, of a phone got shorter. So people were upgrading it more frequently.

Now that's past. And it compares it more difficult. So it does seem like we're still struggling. It's a big company. And they have a huge user base, install base. So, yeah, we're going to see flat type of iPhones for the next several quarters, we think.

Apple says it has begun piloting a new App Store feature called “contingent pricing” that will help developers lure in customers with cheaper subscriptions based on their previous purchases. The contingent pricing model will let developers offer discounts to customers who already have subscriptions to other services, be it those developers’ own apps or their competitors’. It’s starting with a select group of participants before rolling it out to more developers “in the coming months.”

“Contingent pricing for subscriptions on the App Store — a new feature that helps you attract and retain subscribers — lets you supply customers a discounted subscription price as long as they’re actively subscribed to a different subscription,” Apple wrote in a post on the Apple Developer website. “It can be used for subscriptions from one developer or two different developers.” Per 9to5Mac, Apple further explained that these competitive discounts will be highly visible to customers both on the App Store and “in off-platform marketing channels” so they can easily find and get in on the perks.

It comes at a time of ongoing scrutiny into Apple’s practices with its App Store and how it handles in-app purchases, which came to a head in Apple’s battle with Fortnite owner Epic Games. Just this fall, Apple asked the Supreme Court to reverse its previous ruling that required it to allow developers to circumvent its 30 percent transaction fee by supporting outside payment systems. But it's still looking for ways to get back in developers' good graces. The company says it will release more information on the new program next month.

Losing an iPhone to a thief stinks. But it becomes even worse when the robber has your passcode, too, letting them lock you out of iCloud photos, access other accounts, and more. That's why The Wall Street Journal reports Apple is testing a new feature called Stolen Device Protection.

Apparently, enabling this new setting will add safeguards to sensitive data on your iPhone. For example, if the device detects the user is located somewhere unfamiliar, biometrics (face or touch) will be needed to tinker with Apple ID accounts. Even then, an hour delay will go into effect, with biometrics required again after that time period to gain access to Apple ID. This same method will be utilized to protect robbers from turning off the Find My feature on the smartphone as well.

Stolen Device Protection has reportedly been rolled out to beta testers, and again, must be turned on by an iPhone owner to work. One thing it won't protect, per The Wall Street Journal, is Apple Pay for purchasing stuff, so it's not a salve for everything in the unfortunate case of a stolen iPhone.

In September, Apple unveiled the iPhone 15 lineup. The company said back then that iPhone 15 Pro would become the best gaming console, as the device supports the Resident Evil 4 remake, Assassin's Creed Mirage, and Death Stranding.

In accurate years Apple  (AAPL) - Get Free Report has staked its reputation on the security of its iPhones. 

Apple has released numerous commercials over the past couple of years touting how secure its phones are and how much the company values the privacy of its users. 

Related: Apple names top 9 apps of 2023 – here's what made the list

And now it is making a change in its latest iOS update that will make their phones even more secure, even if that device is stolen. 

The move comes after the Wall Street Journal reported on criminals who used iPhone owners' passcodes to change their Apple accounts, access saved passwords, steal money and lock them out of their iCloud.

But now, Apple will debut a new Stolen Device Protection setting in its upcoming software update that is supposed to keep thieves out your phone, even if they have your phone. 

As it stands now, if a person has access to your passcode and can open your phone, they pretty much control your entire Apple account. But with the new Stolen Device Protection button, which users will have to enable, then certain settings will be restricted.

If the phone is away from a familiar location, then the device will require facial or fingerprint recognition in order to change an Apple ID password, if the feature is enabled. It will then implement an hour-long delay before the change can be made. 

After an hour has passed, the user will have to reconfirm with another biometric recognition before the password can be changed. 

While Apple is allowing the new update to be voluntary, there is a real danger of losing your entire Apple account if a thief steals your phone. If a thief accesses your phone they can enable what is called a recovery key.

The key is meant to protect users from online hackers, but in the hands of a thief, it keeps the original user from resetting their Apple ID password with a phone number or email. 

Apple will be rolling out the feature to all iPhone users with its next iOS update. In the meantime, the feature will be available to beta testers. 

Get exclusive access to portfolio managers’ stock picks and proven investing strategies with Real Money Pro. Get started now.

Apple says it has begun piloting a new App Store feature called “contingent pricing” that will help developers lure in customers with cheaper subscriptions based on their other purchases. The contingent pricing model will let developers offer discounts to customers who already have subscriptions to other services, be it those developers’ own apps or participating partners’. It’s starting with a select group of participants before rolling it out to more developers “in the coming months.”

“Contingent pricing for subscriptions on the App Store — a new feature that helps you attract and retain subscribers — lets you supply customers a discounted subscription price as long as they’re actively subscribed to a different subscription,” Apple wrote in a post on the Apple Developer website. “It can be used for subscriptions from one developer or two different developers.” Per 9to5Mac, Apple further explained that these bundled discounts will be highly visible to customers both on the App Store and “in off-platform marketing channels” so they can easily find and get in on the perks.

It comes at a time of ongoing scrutiny into Apple’s practices with its App Store and how it handles in-app purchases, which came to a head in Apple’s battle with Fortnite owner Epic Games. Just this fall, Apple asked the Supreme Court to reverse its previous ruling that required it to allow developers to circumvent its 30 percent transaction fee by supporting outside payment systems. But it's still looking for ways to get back in developers' good graces. The company says it will release more information on the new program next month.

Correction, December 17, 2023, 3:30PM ET: This story originally stated that contingent pricing allowed developers to offer cheaper plans than competitors. It actually only works between participating parties. We apologize for the error.

Apple (AAPL) is one of the "Magnificent Seven" stocks — a top performer in 2023 with shares up 55% year-to-date — but Barclays Senior Analyst Tim Long is staying on the sidelines.

Speaking with Yahoo Finance's Seana Smith at the Barclays Global Technology Conference, Long said he 'struggles' with Apple's multiple and valuation.

"Apple has basically lowered guidance four quarters in a row...the stock doesn't operate in line with fundamentals," Long added.

Long also pointed to sluggish iPhone 15 sales while warning of "another year of weakness on the hardware side" if macroeconomic conditions remain challenged.

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video transcript

SEANA SMITH: And, Tim, another name that I know our audience is very familiar with, and it's a favorite among investors, not one of yours, though. And that's Apple. You have had a neutral rating on the stock now for quite some time.

TIM LONG: Yes.

SEANA SMITH: Why are you a bit bearish?

TIM LONG: Yeah. So Apple's a very tricky one. We're in a period now where the fundamentals are not good. They've basically lowered guidance maybe four quarters in a row. They don't supply official guidance, but numbers have come down for four quarters in a row. And the stock's up, whatever, 30% or 40% this year.

So it's not always one as a stock that operates in line with fundamentals. And we struggle with the multiple and the valuation on it. I mean, this-- before five, six years ago, this was pretty steadily a mid-teens, multiple stock. And then after a two-year period, it was a 30 multiple stock. I don't know what really changed.

So we still see weakness in iPhone 15. We were just in Asia. It sounds like the 16, next year's version, is going to be much of the same, nothing too different in it, which means, if we're still in a rough macro environment, it could be another year of weakness on the hardware side.

Story continues

And then we always identify services as a great business, but there's some really big risks there. And obviously, there's this Google Department of Justice case, where there's a very large revenue stream coming in to Apple to be the default browser. And that's potentially at risk now. There's a lot of risks around the App Store being investigated or in about 15 different countries. So a lot of risk to the high multiple part of that business as well.

SEANA SMITH: Going back to what you said about the iPhone 15 and now looking at the 16, but 15. From your checks, what does demand look like?

TIM LONG: It's fallen. We-- some of the markets like China was an important market where Apple was growing double digits in the first half of the year. And then that turned down to two double digit declines the last few months now. So demand is not great. What we saw through COVID for a number of their product lines was just a rapid acceleration of unit growth. So the useful life, if you will, of a phone got shorter. So people were upgrading it more frequently.

Now that's past. And it compares it more difficult. So it does seem like we're still struggling. It's a big company. And they have a huge user base, install base. So, yeah, we're going to see flat type of iPhones for the next several quarters, we think.

Apple says it has begun piloting a new App Store feature called “contingent pricing” that will help developers lure in customers with cheaper subscriptions based on their other purchases. The contingent pricing model will let developers offer discounts to customers who already have subscriptions to other services, be it those developers’ own apps or participating partners’. It’s starting with a select group of participants before rolling it out to more developers “in the coming months.”

“Contingent pricing for subscriptions on the App Store — a new feature that helps you attract and retain subscribers — lets you supply customers a discounted subscription price as long as they’re actively subscribed to a different subscription,” Apple wrote in a post on the Apple Developer website. “It can be used for subscriptions from one developer or two different developers.” Per 9to5Mac, Apple further explained that these bundled discounts will be highly visible to customers both on the App Store and “in off-platform marketing channels” so they can easily find and get in on the perks.

It comes at a time of ongoing scrutiny into Apple’s practices with its App Store and how it handles in-app purchases, which came to a head in Apple’s battle with Fortnite owner Epic Games. Just this fall, Apple asked the Supreme Court to reverse its previous ruling that required it to allow developers to circumvent its 30 percent transaction fee by supporting outside payment systems. But it's still looking for ways to get back in developers' good graces. The company says it will release more information on the new program next month.

Correction, December 17, 2023, 3:30PM ET: This story originally stated that contingent pricing allowed developers to offer cheaper plans than competitors. It actually only works between participating parties. We apologize for the error.