Industry Comparison: Evaluating Apple Against 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 (NASDAQ: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.

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.

Through a detailed examination of Apple, we can deduce the following trends:

• At 36.39, the stock's Price to Earnings ratio is 0.78x less than the industry average, suggesting favorable growth potential.

• The elevated Price to Book ratio of 54.05 relative to the industry average by 5.86x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 8.86, which is 2.87x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The Return on Equity (ROE) of 35.34% is 29.55% above the industry average, highlighting efficient use of equity to generate profits.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.03 Billion, which is 96.97x above the industry average, indicating stronger profitability and robust cash flow generation.

• The gross profit of $43.72 Billion is 51.44x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 9.63% exceeds the industry average of 6.97%, indicating strong sales performance and market outperformance.

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 light of the Debt-to-Equity ratio, a comparison between Apple and its top 4 peers reveals the following information:

• In the context of the debt-to-equity ratio, Apple holds a middle position among its top 4 peers.

• This indicates a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.54, which implies a relatively balanced financial structure with a reasonable debt-equity mix.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Apple demonstrates strong performance compared to its industry peers, reflecting favorable financial health and growth prospects.

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