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 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 | 32.89 | 47.21 | 8.02 | 37.11% | $32.25 | $44.87 | 5.08% |
| Super Micro Computer Inc | 27.18 | 4.68 | 1.46 | 1.72% | $0.14 | $0.44 | 19.48% |
| Hewlett Packard Enterprise Co | 20 | 1.14 | 0.88 | -4.4% | $0.87 | $2.17 | 5.87% |
| Western Digital Corp | 22.14 | 4.36 | 1.46 | 5.86% | $0.28 | $0.91 | 30.94% |
| NetApp Inc | 18.81 | 20.55 | 3.39 | 33.42% | $0.43 | $1.19 | 3.84% |
| Pure Storage Inc | 153.18 | 15.29 | 6.15 | -1.1% | $0.04 | $0.54 | 12.26% |
| Eastman Kodak Co | 13.33 | 0.92 | 0.55 | -1.66% | $0.02 | $0.05 | -0.8% |
| Turtle Beach Corp | 18.95 | 2.34 | 0.78 | -0.55% | $0.0 | $0.02 | 14.42% |
| Average | 39.08 | 7.04 | 2.1 | 4.76% | $0.25 | $0.76 | 12.29% |
By conducting an in-depth analysis of Apple, we can identify the following trends:
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The Price to Earnings ratio of 32.89 is 0.84x lower than the industry average, indicating potential undervaluation for the stock.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 47.21 which exceeds the industry average by 6.71x.
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The stock's relatively high Price to Sales ratio of 8.02, surpassing the industry average by 3.82x, may indicate an aspect of overvaluation in terms of sales performance.
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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.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.25 Billion, which is 129.0x above the industry average, implying stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $44.87 Billion, which indicates 59.04x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 5.08%, which is much lower than the industry average of 12.29%, the company is experiencing a notable slowdown in sales expansion.
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.
In terms of the Debt-to-Equity ratio, Apple stands in comparison with its top 4 peers, leading to the following comparisons:
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As Apple is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 1.47 compared to the other companies.
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This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.
Key Takeaways
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that Apple is efficiently utilizing its resources and generating strong profits, despite slower revenue growth. Overall, Apple's financial performance is solid, with room for potential growth in the future.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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