In today’s rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) against its key competitors in the Technology Hardware, Storage & Peripherals industry. By examining key 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 | 37.13 | 55.51 | 9.99 | 39.36% | $35.55 | $48.34 | 7.94% |
| Western Digital Corp | 21.89 | 9.02 | 5.58 | 20.57% | $1.48 | $1.23 | 27.4% |
| Hewlett Packard Enterprise Co | 25.13 | 1.15 | 0.86 | 1.14% | $1.11 | $2.67 | 18.5% |
| Pure Storage Inc | 202.80 | 20.72 | 8.45 | 3.68% | $0.09 | $0.6 | 12.73% |
| NetApp Inc | 19.42 | 22.57 | 3.43 | 23.13% | $0.38 | $1.1 | 1.17% |
| Super Micro Computer Inc | 25.57 | 2.97 | 0.98 | 2.62% | $0.25 | $0.47 | -15.49% |
| Logitech International SA | 25.55 | 7.93 | 3.60 | 7.99% | $0.22 | $0.51 | 6.27% |
| Diebold Nixdorf Inc | 47.41 | 2.07 | 0.65 | 3.73% | $0.11 | $0.25 | 1.95% |
| Turtle Beach Corp | 15.42 | 2.39 | 0.83 | 1.51% | $0.01 | $0.03 | -14.74% |
| Average | 47.9 | 8.6 | 3.05 | 8.05% | $0.46 | $0.86 | 4.72% |
Through a thorough examination of Apple, we can discern the following trends:
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At 37.13, the stock’s Price to Earnings ratio is 0.78x less than the industry average, suggesting favorable growth potential.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 55.51 which exceeds the industry average by 6.45x.
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With a relatively high Price to Sales ratio of 9.99, which is 3.28x the industry average, the stock might be considered overvalued based on sales performance.
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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.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 77.28x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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With higher gross profit of $48.34 Billion, which indicates 56.21x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company’s revenue growth of 7.94% exceeds the industry average of 4.72%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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.
When evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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When compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.34.
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This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on 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 ROE, EBITDA, gross profit, and revenue growth, Apple outperforms its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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