In today’s rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate 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 | 37.95 | 56.73 | 10.21 | 39.36% | $35.55 | $48.34 | 7.94% |
| Western Digital Corp | 23.03 | 9.50 | 5.87 | 20.57% | $1.48 | $1.23 | 27.4% |
| Pure Storage Inc | 215.98 | 22.07 | 9 | 3.68% | $0.09 | $0.6 | 12.73% |
| Hewlett Packard Enterprise Co | 25.81 | 1.19 | 0.88 | 1.14% | $1.11 | $2.67 | 18.5% |
| NetApp Inc | 19.56 | 22.55 | 3.46 | 31.11% | $0.47 | $1.23 | 2.83% |
| Super Micro Computer Inc | 26.31 | 3.06 | 1.01 | 2.62% | $0.25 | $0.47 | -15.49% |
| Logitech International SA | 25.66 | 7.96 | 3.62 | 7.99% | $0.22 | $0.51 | 6.27% |
| Diebold Nixdorf Inc | 48.14 | 2.11 | 0.66 | 3.73% | $0.11 | $0.25 | 1.95% |
| Turtle Beach Corp | 15.29 | 2.38 | 0.83 | 1.51% | $0.01 | $0.03 | -14.74% |
| Average | 49.97 | 8.85 | 3.17 | 9.04% | $0.47 | $0.87 | 4.93% |
Through a detailed examination of Apple, we can deduce the following trends:
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The Price to Earnings ratio of 37.95 is 0.76x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 56.73, which is 6.41x 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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With a relatively high Price to Sales ratio of 10.21, which is 3.22x 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 30.32% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 75.64x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $48.34 Billion, which indicates 55.56x above the industry average, indicating 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 4.93%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 considering the Debt-to-Equity ratio, Apple can be compared to its top 4 peers, leading to the following observations:
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Among its top 4 peers, Apple is placed in the middle with a moderate debt-to-equity ratio of 1.34.
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This implies a balanced financial structure, with a reasonable proportion of debt and equity.
Key Takeaways
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Apple demonstrates strong performance compared to its industry peers, reflecting favorable financial health and growth prospects.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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