Comparative Study: Apple And Industry Competitors In Technology Hardware, Storage & Peripherals Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Apple (NASDAQ:AAPL) alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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.

Upon a comprehensive analysis of Apple, the following trends can be discerned:

• The Price to Earnings ratio of 38.09 is 0.83x lower than the industry average, indicating potential undervaluation for the stock.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 56.94 which exceeds the industry average by 6.97x.

• The Price to Sales ratio of 10.25, which is 3.55x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 39.36% that is 30.27% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 75.64x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• With higher gross profit of $48.34 Billion, which indicates 55.56x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company is experiencing remarkable revenue growth, with a rate of 7.94%, outperforming the industry average of 4.84%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.

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 evaluating Apple against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

• 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 1.34.

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.