Analyzing Apple In Comparison To 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.

By thoroughly analyzing Apple, we can discern the following trends:

• With a Price to Earnings ratio of 36.74, which is 0.75x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• With a Price to Book ratio of 54.93, which is 5.94x the industry average, Apple might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• With a relatively high Price to Sales ratio of 9.88, which is 3.06x the industry average, the stock might be considered overvalued based on sales performance.

• The Return on Equity (ROE) of 39.36% is 29.14% above the industry average, highlighting efficient use of equity to generate profits.

• 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.

• With higher gross profit of $48.34 Billion, which indicates 76.73x 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 3.47%.

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.

When assessing Apple against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• 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 1.34, which implies a relatively balanced financial structure with a reasonable debt-equity mix.

Key Takeaways

For Apple, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest the market values the company's assets and sales highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Apple outperforms its industry peers, reflecting strong financial performance and growth potential.

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