In today’s fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. 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 | 36.99 | 55.30 | 9.95 | 39.36% | $35.55 | $48.34 | 7.94% |
| Western Digital Corp | 21.26 | 8.76 | 5.42 | 20.57% | $1.48 | $1.23 | 27.4% |
| Hewlett Packard Enterprise Co | 24.81 | 1.14 | 0.85 | 1.14% | $1.11 | $2.67 | 18.5% |
| Pure Storage Inc | 200.32 | 20.47 | 8.35 | 3.68% | $0.09 | $0.6 | 12.73% |
| NetApp Inc | 19.28 | 22.31 | 3.42 | 23.13% | $0.38 | $1.1 | 1.17% |
| Super Micro Computer Inc | 26.24 | 3.05 | 1 | 2.62% | $0.25 | $0.47 | -15.49% |
| Logitech International SA | 25.48 | 7.90 | 3.59 | 7.99% | $0.22 | $0.51 | 6.27% |
| Diebold Nixdorf Inc | 46.93 | 2.05 | 0.64 | 3.73% | $0.11 | $0.25 | 1.95% |
| Turtle Beach Corp | 15.03 | 2.34 | 0.81 | 1.51% | $0.01 | $0.03 | -14.74% |
| Average | 47.42 | 8.5 | 3.01 | 8.05% | $0.46 | $0.86 | 4.72% |
Upon a comprehensive analysis of Apple, the following trends can be discerned:
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At 36.99, the stock’s Price to Earnings ratio is 0.78x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 55.3 relative to the industry average by 6.51x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 9.95, which is 3.31x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 39.36% is 31.31% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion is 77.28x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The gross profit of $48.34 Billion is 56.21x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company’s revenue growth of 7.94% is notably higher compared to the industry average of 4.72%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company’s financial health and its reliance on debt financing.
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 assessing Apple against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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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. Apple’s high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry competitors. Overall, Apple appears to be attractively priced based on its earnings multiples, while also demonstrating robust profitability and growth metrics.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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