Apple Stock Faces Valuation Concerns Amid Slowing User Growth

KeyBanc has maintained its Underweight rating on Apple stock due to concerns over valuation. The firm's data shows that indexed spending rose 9% month-over-month, which KeyBanc views as relatively neutral for Apple.

The analyst firm considers near-term expectations for Apple reasonable, but expects slower user growth to ultimately slow Services revenue. KeyBanc anticipates investors will pay a lower multiple for price-led growth compared to volume-led growth.

Apple trades at 34 times price-to-earnings versus a three-year average of 28 times, making valuation compression likely, according to KeyBanc. The firm's data shows that Apple is currently overvalued.