In today’s rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) against its key competitors in the Technology Hardware, Storage & Peripherals industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company’s performance within the industry.
Apple Background
Apple is among the largest companies in the world, with a broad portfolio of hardware and software products targeted at consumers and businesses. Apple’s iPhone makes up a majority of the firm sales, and Apple’s other products like Mac, iPad, and Watch are designed around the iPhone as the focal point of an expansive software ecosystem. Apple has progressively worked to add new applications, like streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors while working with subcontractors like Foxconn and TSMC to build its products and chips. Slightly less than half of Apple’s sales come directly through its flagship stores, with a majority of sales coming indirectly through partnerships and distribution.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 37.21 | 55.62 | 10.01 | 39.36% | $35.55 | $48.34 | 7.94% |
| Western Digital Corp | 22.22 | 9.16 | 5.67 | 20.57% | $1.48 | $1.23 | 27.4% |
| Hewlett Packard Enterprise Co | 25.33 | 1.16 | 0.87 | 1.14% | $1.11 | $2.67 | 18.5% |
| Pure Storage Inc | 209.20 | 21.37 | 8.72 | 3.68% | $0.09 | $0.6 | 12.73% |
| NetApp Inc | 19.03 | 21.95 | 3.37 | 23.13% | $0.38 | $1.1 | 1.17% |
| Super Micro Computer Inc | 25.85 | 3 | 0.99 | 2.62% | $0.25 | $0.47 | -15.49% |
| Logitech International SA | 25.13 | 7.79 | 3.54 | 7.99% | $0.22 | $0.51 | 6.27% |
| Diebold Nixdorf Inc | 47.90 | 2.09 | 0.66 | 3.73% | $0.11 | $0.25 | 1.95% |
| Turtle Beach Corp | 15.24 | 2.37 | 0.82 | 1.51% | $0.01 | $0.03 | -14.74% |
| Average | 48.74 | 8.61 | 3.08 | 8.05% | $0.46 | $0.86 | 4.72% |
Through a detailed examination of Apple, we can deduce the following trends:
-
With a Price to Earnings ratio of 37.21, which is 0.76x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 55.62 which exceeds the industry average by 6.46x.
-
With a relatively high Price to Sales ratio of 10.01, which is 3.25x the industry average, the stock might be considered overvalued based on sales performance.
-
The company has a higher Return on Equity (ROE) of 39.36%, which is 31.31% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
-
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 77.28x above the industry average, implying stronger profitability and robust cash flow generation.
-
Compared to its industry, the company has higher gross profit of $48.34 Billion, which indicates 56.21x above the industry average, indicating stronger profitability and higher earnings from its core operations.
-
With a revenue growth of 7.94%, which surpasses the industry average of 4.72%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company’s financial health and risk profile, aiding in informed decision-making.
When examining Apple in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
-
As Apple is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 1.34 compared to the other companies.
-
This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.
Key Takeaways
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. Apple’s high ROE, EBITDA, gross profit, and revenue growth outperform industry peers, reflecting strong financial performance and growth prospects.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
link