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CNBC
24 minutes ago
- CNBC
Downside risks on Apple are growing. Using options to hedge against potential declines
Apple's (AAPL) recent rally has lifted the stock back towards valuation levels that have downside risks when we factor into the lack of meaningful innovation. While recent earnings were better than feared and investments in the U.S. may eased regulatory concerns, the signs of decelerating growth and a lack of meaningful innovation with continued reliance on financial engineering — suggest renewed downside risk if market expectations aren't met. Trade timing & outlook AAPL has rebounded strongly, now trading around $230 after the post‑earnings spike with relative strength versus the S & P 500. However, this move approaches major resistance levels, and both momentum and volumes have slowed, raising the odds of consolidation or pullback in the absence of fresh catalysts. Looking at a longer term chart, we see a potential head and shoulders topping formation in the making that would target $200 to the downside. Fundamentals Apple recent rally pushes its forward P/E multiples near decade highs, suggesting diminishing margin for error. While the market rewards Apple's strong margins — but they're increasingly driven by services, not innovation. And the average target price across 40 analysts that cover AAPL is $236, reflecting only 2% upside. Forward PE ratio: 29x vs. Industry Average 20x Expected EPS growth: 9% vs. Industry Average 11% Expected revenue growth: 6% vs. Industry Average 6% Net margins: 24% vs. Industry Average 7% Bearish thesis Apple's AI upgrades, notably for Siri and Apple Intelligence, are delayed and underwhelming despite investing over $10 billion in AI. Most of the value creation levers now appear linked to services and share repurchases, raising sustainability concerns. With tech concentration in the S & P 500 near 40%, and broader economic uncertainty, consensus caution remains around correcting valuations across the sector. Options strategy To reflect these headwinds, I'm using a bearish-to-neutral income structure by Selling the Sept. 26 $230/$245 Call Vertical @ $6.10 credit. This entails: Selling the Sept. 26 $230 Call @ $7.90 Buying the Sept. 26 $245 Call @ $1.80 Max profit: $610 per contract if AAPL is below $230 at expiration Max risk: $890 per contract if AAPL is above $245 at expiration Breakeven: $236.10 View this Trade with Updated Prices at OptionsPlay This structure caps upside — reflecting valuation saturation — while capturing time decay and offering modest downside exposure if innovation delays and market sentiment puts pressure on the stock. Summary: While Apple remains fundamentally strong, the elevated valuation, innovation stagnation, and macro uncertainty suggests a cautious stance. The defined-risk bear call vertical captures this outlook where momentum stalls and valuation realignment sets in. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
Forbes
24 minutes ago
- Forbes
Smaller SBA Loans Mean Bigger Benefits For SMB Ecosystem
Having an idea is easy; executing the vision is the hard part, according to Guy Kawasaki. As one of the original employees responsible for marketing Apple's first Macintosh computer in the 1980s, he should know. However, executing a vision requires access to capital, and America's small businesses, particularly those qualified under the SBA, are facing a significant shortage of funds. Earlier this summer, I had the opportunity, alongside other lenders, to meet with senior executives at the Small Business Administration in Washington. Together, we presented a three-pronged strategy aimed at increasing small-dollar SBA loans of $150,000 or less. Our goal is to make them more affordable for lenders, more attractive for SMBs, and more profitable for the SBA. Here's what we shared with them. SBA-Qualified Borrowers are Essential for the Health of the Lending Community Running a business that is designed for long-term success and capable of pursuing its vision requires timely access to the right capital. Financial institutions play a crucial role in the success of SMBs. Among lenders, the most respected SMBs are those that qualify for SBA loans due to their creditworthiness and strategic use of capital. Maintaining a strong relationship between SBA-qualified borrowers, loyal and creditworthy consumers, and lenders is vital. According to data from Lendio's latest whitepaper, 'Modernizing the Lending Experience for SBA-qualified Borrowers', SBA-qualified borrowers are more loyal to their banks or credit unions than the general population of borrowers. However, they're open to seek alternative lenders if they feel their needs are not adequately met, customer service is lacking, and they can find a better digital banking experience elsewhere. Approximately ten years ago, the SBA introduced the SBSS (Small Business Scoring Service) to assign a numerical scoring value to individual borrowers based on their creditworthiness and perceived ability to repay a loan in full. While helpful in theory, lenders often become complacent with a metric that has proven inaccurate over time, leading to loans that underperform and have severe repercussions for both lenders and borrowers. Analyzing cash flow data effectively addresses this issue. This information is vital because it is unalterable, allowing lenders to accurately evaluate an SMB's cash flow and overall financial health. Platforms like Lendio's Intelligent Lending offer banks and financial institutions access to this valuable data, providing deeper insights and resulting in a 45% reduction in manual underwriting costs for lenders who utilize cash flow analysis. In addition to making these loans more profitable, it is also essential to minimize the human resources required for the underwriting process, so that a greater number of smaller-dollar loans can reach borrowers. Our data indicate that approximately 85% of small businesses in America are seeking a loan of less than $150,000; however, underwriting such small-dollar loans is not beneficial for lenders. When they do, they often apply the same underwriting standards to a million-dollar loan as they would to a $100,000 loan, resulting in a prime interest rate of 4-6% over a ten-year term or 20-24% at a five-year term. The process is too time-intensive and costly, with not enough ROI for lenders to continue pursuing and untenable lending terms for SMBs to accept. Risk-adjusted pricing, where the terms are dependent on the borrower's risk profile, could make these loans easier to underwrite, more profitable, and better performing for lenders, thereby addressing this issue. The new Small Business Administration, just six months into its term, faces a challenging task: addressing what it believes is a failing portfolio. Given the data available, it's not surprising that they are convinced that larger dollar loans are the key solution. They have also begun implementing significant policy changes, including stricter ownership requirements, staff reductions, and office restructuring. Like many new administrations, they are eager to demonstrate their value to Americans and correct the perceived mistakes of their predecessors. However, they should avoid drastic measures that could undermine existing systems. Our goal of supporting SMBs and lenders must also include ensuring the SBA's success. The SBA is a vital partner in the quest for access to capital, and building strong working relationships is essential. So, what does this mean for the future of lending? SBA-qualified borrowers are at the forefront of SMB lending, and any shifts in their expectations will significantly impact the market. Both lenders and the SBA should pay attention to these trends to maintain this crucial relationship and make improvements to small-dollar loans a top priority. The lending community believes change is possible. Our next steps will involve surveying lenders who currently provide small-dollar loans and hosting a summit to discuss best practices and offer recommendations to the SBA. To increase small-dollar loans to SMBs, strong partnerships, open lines of communication, and a greater reliance on effective analytics will be critical.
Business Wire
an hour ago
- Business Wire
Statement from Marcus Lemonis, Executive Chairman of Bed Bath & Beyond
MURRAY, Utah--(BUSINESS WIRE)--Beyond, Inc. (NYSE:BYON) has issued the following statement from Marcus Lemonis, Executive Chairman of Bed Bath & Beyond: We will not open or operate retail stores in California. This decision isn't about politics — it's about reality. California has created one of the most overregulated, expensive, and risky environments for businesses in America. It's a system that makes it harder to employ people, harder to keep doors open, and harder to deliver value to customers. The result? Higher taxes, higher fees, higher wages that many businesses simply cannot sustain, and endless regulations that strangle growth. Even when the state announces a budget surplus, it's built on the backs of ordinary citizens who are paying too much and businesses who are squeezed until they break. At Bed Bath & Beyond, our responsibility is to our customers and our shareholders. We will not participate in a system that undermines both. Instead, we are investing in a California strategy that works: 24–48-hour delivery, and in many cases, same-day service. Californians will continue to get the products they love through — but without the inflated costs created by an unsustainable model. We're taking a stand because it's time for common sense. Businesses deserve the chance to succeed. Employees deserve jobs that last. And customers deserve fair prices. California's system delivers the opposite. That's why Bed Bath & Beyond will serve California customers directly through on our terms, and with their best interests at heart. — Marcus Lemonis Executive Chairman, Bed Bath & Beyond About Beyond Beyond, Inc. (NYSE:BYON), based in Murray, Utah, is an ecommerce-focused retailer with an affinity model that owns or has ownership interests in various retail brands, offering a comprehensive array of products and services that enable its customers to enhance everyday life through quality, style, and value. The Company currently owns Bed Bath & Beyond, Overstock, buybuy BABY, and other related brands and websites as well as a blockchain asset portfolio. The Company regularly posts information and updates on its Newsroom and Investor Relations pages on its website, Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include all statements other than statements of historical fact, including but not limited to statements regarding our strategy, store openings, our geographic footprint, and the timing of any of the foregoing. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025, our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2025, filed with the SEC on July 29, 2025, and in our subsequent filings with the SEC.
