Should you buy Apple stock before January 30?

January 30 will be an important day for Apple (AAPL 0.75%) stock, because that’s when the company reports results for the first quarter of its 2025 fiscal year (ending around Dec. 31). This is a huge deal because it includes the all-important holiday quarter, which could make or break Apple stock.

Apple needs to change the narrative around its stock, as the company has seen fairly stagnant growth over the past few years. The news could mark a huge shift in sentiment toward Apple stock, and a strong report is needed to maintain the status quo.

Apple must revive revenue growth this year

Apple is one of the most recognizable consumer electronics brands in the world. It has built a powerhouse on an ecosystem that seamlessly connects devices to each other and has managed to capture the most important audience for any business: young consumers.

This generated significant growth for many years, but since 2022 its revenue has not really increased.

AAPL Earnings Data (TTM) by YCharts

That’s years of stagnant revenue, which isn’t a good sign for a company. However, Apple is one of the best companies in the world, which hasn’t stopped it from increasing its profits through a combination of share buybacks and improving profitability. Still, there’s only so much juice to squeeze to make a business more efficient, and Apple may be nearing its limit.

AAPL Operating Margin Data (Quarterly) by YCharts

Share buybacks therefore remain the main way to increase profits, but the effect of these buybacks could start to diminish. During the fourth quarter of fiscal 2024 (ended September 28), Apple spent $25 billion on repurchases. But this happened at a time when Apple’s valuation was near its highest level in five years.

AAPL PE ratio data by YCharts

This makes stock buybacks less effective because the company must pay a higher price to buy back its own shares. This reduces the program’s effect on earnings per share (EPS) growth.

So while two of Apple’s main ways to grow profits may be running out of steam, the conversation is returning to revenue growth, which Apple has struggled with in recent years.

Expectations for the first quarter are not high

The fiscal first quarter encompasses the holiday quarter, and it will be a key time for Apple to see whether its iPhones and Apple Intelligence have made a difference for consumers. Apple is seeing increasing competition from Android phone makers, which could weigh on Apple’s bottom line.

Wall Street analysts aren’t expecting much from Apple in the first quarter, as they forecast sales growth of 3.9% and EPS growth of 7.8%. Investors can be very critical of Apple even if it publishes results that everyone expects.

So, should investors buy Apple stock before January 30? I would say no.

There’s not a lot of optimism about Apple’s business right now, and even if the company reports an explosive quarter, expectations are so high that Apple stock probably won’t move. It currently trades at 32 times forward earnings, which is normally a level reserved for a company whose earnings and revenue are growing at least around the mid-teens.

Apple isn’t far off, so there’s a lot of risk and not a ton of reward in the stock. There are many cheaper alternatives with better growth than Apple, and investors should put their money there before buying Apple stock.

Keithen Drury has no position in any of the stocks mentioned. The Motley Fool holds positions at Apple and recommends it. The Motley Fool has a disclosure policy.