Why Apple Finished 2015 on a Sour Note

This is the last day of Apple’s first fiscal quarter of 2016. By all the measures that should matter to Wall Street—rate of growth, free cash flow, price to earnings, share of profit, etc.—Apple had a very good year.

Yet its stock is trading lower than it was last year at this time, and even bullish sell-side Apple analysts are starting to get cold feet. In the past 10 days, six have lowered their price targets:

  • Daniel Ives, FBR: To $150 from $175 (14%)
  • Mark Moskowitz, Barclays: To $150 from $155 (3%).
  • Katy Huberty, Morgan Stanley: To $143 from $162 (13%)
  • Amit Daryanani, RBC: To $140 from $150 (7%)
  • Aaron Rakers, Stifel: To $140 from $150 (7%)
  • Timothy Arcuri, Cowen: To $130 from $135 (4%)

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At $108.03, Apple is trading nearly 25% below even these lowered price targets.

In their notes to clients, the six analysts all cite recent reports of cuts in the Asian supply chain and the risk that, for the next couple of quarters, Apple could sell fewer iPhones than it did the year before.

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But at the bottom of those notes the analysts cite even deeper risks—that in 12 months they’ll be lowering their targets even further. Here, for example, is how FBR analyst Daniel Ives framed the dangers:

  • Sustainability of growth. At Apple’s size, the company continues to drive impressive growth on an increasingly larger base. Competition coming from other well-funded companies, such as Samsung, Google (GOOG), and Microsoft (MSFT), could lead to a loss of market share and revenue growth.
  • Economic activity. Apple depends on the overall economic environment showing improvement over the coming years in certain regions (e.g., Europe, China, etc.). If there is a downturn in the consumer spending environment, this could diminish Apple’s growth prospects and profitability.
  • Technological change. Apple operates in an industry that is highly susceptible to rapid technological change. There can be no assurance that Apple’s existing products will continue to be positioned properly in the market or that Apple will be able to introduce new or enhanced products into the market on a timely basis.
  • Reliance on a small number of products. The majority (over 60% of FY15E revenue) of Apple’s revenue comes from one of the company’s key product lines (iPhone). While the iPhone has contributed to Apple’s strong top-line/profit growth in the past, a heavy increase in competition and maturation in the product line could significantly affect revenue growth.

This is the bear case for Apple and it’s one you can’t ignore. Because based on how the stock is trading, it’s the message Wall Street is hearing.

SEE ALSO: Does the bear case against Apple make any sense at all?

Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple (AAPL) coverage at fortune.com/ped or subscribe via his RSS feed.

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