Understanding Apple's Position In Technology Hardware, Storage & Peripherals Industry Compared To Competitors

In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Apple AAPL and its primary competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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.

By conducting a comprehensive analysis of Apple, the following trends become evident:

• The stock's Price to Earnings ratio of 33.36 is lower than the industry average by 0.85x, suggesting potential value in the eyes of market participants.

• The elevated Price to Book ratio of 47.88 relative to the industry average by 6.76x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 8.13, surpassing the industry average by 3.85x, may indicate an aspect of overvaluation in terms of sales performance.

• 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.

• 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.

• The gross profit of $44.87 Billion is 59.04x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 5.08% is significantly below the industry average of 12.29%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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 holds a middle position in terms of the debt-to-equity ratio compared to its top 4 peers.

• This indicates a balanced financial structure with a moderate level of debt and an appropriate reliance on equity financing with a debt-to-equity ratio of 1.47.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Apple's assets and sales highly. Apple's high ROE, EBITDA, and gross profit reflect strong profitability, while the low revenue growth may indicate a need for expansion strategies to align with industry trends.

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