Evaluating Apple Against Peers In Technology Hardware, Storage & Peripherals Industry

Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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.

By carefully studying Apple, we can deduce the following trends:

• With a Price to Earnings ratio of 37.84, which is 0.7x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 56.21 which exceeds the industry average by 5.46x.

• With a relatively high Price to Sales ratio of 9.21, which is 2.6x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 35.34% that is 29.55% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.03 Billion is 86.19x above the industry average, highlighting 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.

• The company's revenue growth of 9.63% exceeds the industry average of 7.09%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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 evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

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

• This suggests a relatively balanced financial structure, where the company maintains a moderate level of debt while also utilizing equity financing with a debt-to-equity ratio of 1.54.

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 revenue growth suggest that Apple is performing exceptionally well in terms of profitability and growth within the industry sector.

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