Analyzing Apple In Comparison To Competitors In Technology Hardware, Storage & Peripherals Industry

In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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.

Through a meticulous analysis of Apple, we can observe the following trends:

• A Price to Earnings ratio of 38.61 significantly below the industry average by 0.78x 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 57.36 which exceeds the industry average by 5.9x.

• With a relatively high Price to Sales ratio of 9.4, which is 2.82x the industry average, the stock might be considered overvalued based on sales performance.

• 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 exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.03 Billion, which is 86.19x above the industry average, implying stronger profitability and robust cash flow generation.

• The gross profit of $43.72 Billion is 47.01x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• With a revenue growth of 9.63%, which surpasses the industry average of 7.09%, the company is demonstrating robust sales expansion and gaining market share.

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.

By considering the Debt-to-Equity ratio, Apple can be compared to its top 4 peers, leading to the following observations:

• Among its top 4 peers, Apple is placed in the middle with a moderate debt-to-equity ratio of 1.54.

• This implies a balanced financial structure, with a reasonable proportion of debt and equity.

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.