Last quarter, Apple (NASDAQ:AAPL) surprised investors when it reported revenue above analysts' consensus estimates. Since then, shares have soared about 20%. With third-quarter results approaching, is Apple about to deliver more upside surprise?

Soaring iPhone sales?
Mark your calendar. On Monday, Apple posted the date for its third fiscal quarter earnings release: July 22.

Screenshot from Apple's Investor News site.

The key metric to watch, as has been the case since the launch of the iPhone in 2007, will be smartphone sales. The iPhone accounts for 57% of the company's total sales and an even larger portion of operating profits. The performance of the segment, therefore, will move the needle on the overall bottom-line results.

In Apple's first fiscal quarter of 2014 (the important holiday quarter), Apple's low year-over-year iPhone sales growth worried investors. Unit sales only grew 6.7%, year over year. Fortunately, with the help of new carriers in China and Japan, that growth rate accelerated to 16.8% in the second quarter.

What kind of growth could we see in the fiscal third quarter? The consensus estimate is for a slightly slower growth rate of 12.1%. But one analyst, who has proved to be meaningfully more accurate than the consensus estimates since she debuted her AlphaWise survey, has much bigger expectations. Morgan Stanley analyst Katy Huberty predicts that Apple sold 39 million iPhones during the quarter, or year-over-year growth of 25%.

iPhone 5s. Source: Apple.

Whether Huberty is close to the mark or not, there's definitely a good chance Apple will be reporting some solid numbers for its most important segment during the third quarter. In Apple's second fiscal quarter of 2014, the company had only just started rolling out phones to China Mobile, the world's largest carrier. As the carrier continues its rapid expansion of its LTE network in China, pent-up demand for the iPhone could prove to be a big driver of sales for Apple.

Also, the addition of NTT DoCoMo, Japan's largest carrier with the iPhone 5s launch, should help year-over-year sales of the iPhone. In the year-ago quarter, the carrier didn't yet sell iPhones.

A disconnect between growth and valuation?
If Apple does, indeed, post 25% year-over-year growth in unit iPhone sales, the disconnect between Apple's conservative valuation and actual growth will look even more baffling.

Even without meaningful growth in the iPhone business, however, Apple's monstrous share repurchase program alone is helping Apple boost EPS. Add in potentially around 20% plus growth in year-over-year iPhone sales next quarter and the stock looks fairly enticing considering its underwhelming P/E ratio of 15.6.

AAPL PE Ratio (TTM) Chart

AAPL P/E Ratio (TTM) data. Source: YCharts.

Beyond this quarter's results, however, will be a much bigger story. Apple has said its pipeline is stuffed with a hot, new line of products -- one of which is likely to bring the Apple brand to an entirely new category. But given Apple's historical performance of product launches and ventures into new categories, this bigger store is likely yet another catalyst for the business beyond a potentially excellent third quarter.

Combining a likely solid third quarter, new products, and a conservative valuation, the risk-reward profile for Apple stock is still looking favorable -- even with the stock just 7% off its all-time high.