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

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Apple AAPL vis-à-vis its key competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.

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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.

When analyzing Apple, the following trends become evident:

• A Price to Earnings ratio of 31.03 significantly below the industry average by 0.86x suggests undervaluation. This can make the stock appealing for those seeking growth.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 44.54 which exceeds the industry average by 6.77x.

• The Price to Sales ratio of 7.56, which is 3.9x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a higher Return on Equity (ROE) of 37.11%, which is 32.35% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.25 Billion, which is 129.0x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $44.87 Billion, which indicates 59.04x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 5.08% is significantly lower compared to the industry average of 12.29%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its 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.

When comparing Apple with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• Apple is positioned in the middle in terms of the debt-to-equity ratio compared to its top 4 peers.

• This suggests a balanced financial structure, where the company maintains a moderate level of debt while also relying on equity financing with a debt-to-equity ratio of 1.47.

Key Takeaways

In comparison to its peers in the Technology Hardware, Storage & Peripherals industry, Apple's PE ratio is considered low, indicating potential undervaluation. However, its PB and PS ratios are high, suggesting overvaluation relative to industry standards. On the other hand, Apple's high ROE, EBITDA, gross profit, and low revenue growth position it favorably among its industry counterparts, reflecting strong operational efficiency and profitability despite slower revenue growth.

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