Competitor Analysis: Evaluating Apple And 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 thorough examination of Apple, we can discern the following trends:

• The stock's Price to Earnings ratio of 37.27 is lower than the industry average by 0.71x, suggesting potential value in the eyes of market participants.

• The elevated Price to Book ratio of 55.72 relative to the industry average by 5.65x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 10.02, surpassing the industry average by 2.88x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 39.36%, which is 29.14% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 93.55x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• The company has higher gross profit of $48.34 Billion, which indicates 76.73x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• With a revenue growth of 7.94%, which surpasses the industry average of 3.47%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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 analyzing Apple in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

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

• This suggests a balanced financial structure, where the company maintains a moderate level of debt while also relying 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.