Market Analysis: Apple And Competitors In Technology Hardware, Storage & Peripherals Industry

Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Apple AAPL in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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.

By analyzing Apple, we can infer the following trends:

• Notably, the current Price to Earnings ratio for this stock, 33.53, is 1.07x above the industry norm, reflecting a higher valuation relative to the industry.

• With a Price to Book ratio of 47.53, which is 8.82x 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.

• The Price to Sales ratio of 8.17, which is 4.92x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• 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.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion is 104.34x above the industry average, highlighting stronger profitability and robust cash flow generation.

• With higher gross profit of $58.27 Billion, which indicates 64.74x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• 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 gauges the extent to which a company has financed its operations through debt relative to equity.

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:

• When evaluating the debt-to-equity ratio, Apple is in the middle position among its top 4 peers.

• The company maintains a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.45, suggesting a relatively balanced financial structure.

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, and gross profit suggest strong profitability and operational efficiency. However, the low revenue growth rate may be a concern for the company's future performance relative to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.