In today’s rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) vis-à-vis its key competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company’s performance in 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 | 35.85 | 53.60 | 9.64 | 39.36% | $35.55 | $48.34 | 7.94% |
| Western Digital Corp | 22.88 | 9.43 | 5.84 | 20.57% | $1.48 | $1.23 | 27.4% |
| Hewlett Packard Enterprise Co | 24.98 | 1.15 | 0.86 | 1.14% | $1.11 | $2.67 | 18.5% |
| Pure Storage Inc | 205.24 | 20.97 | 8.55 | 3.68% | $0.09 | $0.6 | 12.73% |
| NetApp Inc | 18.91 | 21.87 | 3.35 | 23.13% | $0.38 | $1.1 | 1.17% |
| Super Micro Computer Inc | 26.85 | 3.12 | 1.03 | 2.62% | $0.25 | $0.47 | -15.49% |
| Logitech International SA | 25.75 | 7.99 | 3.63 | 7.99% | $0.22 | $0.51 | 6.27% |
| Diebold Nixdorf Inc | 45.54 | 1.99 | 0.63 | 3.73% | $0.11 | $0.25 | 1.95% |
| Average | 52.88 | 9.5 | 3.41 | 8.98% | $0.52 | $0.98 | 7.5% |
By thoroughly analyzing Apple, we can discern the following trends:
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At 35.85, the stock’s Price to Earnings ratio is 0.68x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 53.6, which is 5.64x the industry average, Apple might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The stock’s relatively high Price to Sales ratio of 9.64, surpassing the industry average by 2.83x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 39.36%, which is 30.38% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion is 68.37x above the industry average, highlighting stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $48.34 Billion, which indicates 49.33x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 7.94%, which surpasses the industry average of 7.5%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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.
By analyzing Apple in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.34, indicating a balanced financial structure.
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This suggests that the company maintains a reasonable level of debt while also leveraging equity financing.
Key Takeaways
For Apple, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest the market values the company’s assets and sales highly. In terms of profitability, Apple’s high ROE, EBITDA, and gross profit margins outperform industry peers, reflecting strong financial performance. Additionally, the high revenue growth rate indicates a positive outlook for the company’s future earnings potential within the Technology Hardware, Storage & Peripherals industry.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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