In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Apple AAPL alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to 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 | 33.36 | 47.29 | 8.12 | 58.74% | $45.91 | $58.27 | 3.95% |
| Super Micro Computer Inc | 16.20 | 3.57 | 1.13 | 5.29% | $0.4 | $0.67 | 54.93% |
| Hewlett Packard Enterprise Co | 7.93 | 0.86 | 0.72 | 2.39% | $1.11 | $2.29 | 16.27% |
| NetApp Inc | 16.30 | 18.25 | 2.85 | 31.69% | $0.45 | $1.15 | 2.18% |
| Pure Storage Inc | 146.39 | 11.32 | 4.91 | 3.12% | $0.09 | $0.59 | 11.4% |
| Western Digital Corp | 11.82 | 1.17 | 0.90 | 4.89% | $0.96 | $1.52 | 41.33% |
| Eastman Kodak Co | 6.84 | 0.78 | 0.55 | 2.46% | $0.05 | $0.05 | -3.27% |
| Turtle Beach Corp | 14.26 | 1.85 | 0.62 | 18.11% | $0.03 | $0.05 | 46.76% |
| Average | 31.39 | 5.4 | 1.67 | 9.71% | $0.44 | $0.9 | 24.23% |
After thoroughly examining Apple, the following trends can be inferred:
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Notably, the current Price to Earnings ratio for this stock, 33.36, is 1.06x above the industry norm, reflecting a higher valuation relative to the industry.
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With a Price to Book ratio of 47.29, which is 8.76x 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 Price to Sales ratio of 8.12, which is 4.86x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 58.74% that is 49.03% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 104.34x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $58.27 Billion is 64.74x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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With a revenue growth of 3.95%, which is much lower than the industry average of 24.23%, the company is experiencing a notable slowdown in sales expansion.
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.
In terms of the Debt-to-Equity ratio, Apple can be assessed by comparing it to its top 4 peers, resulting in 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 1.45.
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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, PB, and PS ratios are all high compared to its peers, indicating that the stock may be overvalued. On the other hand, Apple's high ROE, EBITDA, gross profit, and low revenue growth suggest strong profitability and operational efficiency relative to its industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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