Evaluating Apple Against Peers 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 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 designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and AirPods, among others. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Fitness, Apple Card, and Apple Pay, among others. Apple's products include internally developed software and semiconductors, and the firm is well known for its integration of hardware, software, semiconductors, and services. Apple's products are distributed online as well as through company-owned stores and third-party retailers.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Apple Inc 29.25 44.87 7.40 37.5% $30.65 $40.43 -0.72%
Hewlett Packard Enterprise Co 19.17 0.99 0.71 2.26% $1.24 $2.51 0.73%
NetApp Inc 13.74 18.14 2.67 14.67% $0.27 $1.0 -10.05%
Super Micro Computer Inc 23.32 6.22 1.93 7.59% $0.19 $0.35 14.45%
Xerox Holdings Corp 12.93 0.60 0.31 1.46% $0.14 $0.54 -5.65%
Corsair Gaming Inc 256.92 2.05 0.95 0.17% $0.01 $0.08 14.63%
Eastman Kodak Co 5.73 0.32 0.29 2.75% $0.06 $0.06 -8.1%
AstroNova Inc 112.75 1.19 0.67 -1.9% $-0.0 $0.01 10.12%
Transact Technologies Inc 12.62 1.55 0.76 2.03% $0.0 $0.01 57.7%
Average 57.15 3.88 1.04 3.63% $0.24 $0.57 9.23%

Through an analysis of Apple, we can infer the following trends:

  • A Price to Earnings ratio of 29.25 significantly below the industry average by 0.51x 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 44.87 which exceeds the industry average by 11.56x.

  • The Price to Sales ratio of 7.4, which is 7.12x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • The company has a higher Return on Equity (ROE) of 37.5%, which is 33.87% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

  • The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $30.65 Billion is 127.71x above the industry average, highlighting stronger profitability and robust cash flow generation.

  • The gross profit of $40.43 Billion is 70.93x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

  • The company is witnessing a substantial decline in revenue growth, with a rate of -0.72% compared to the industry average of 9.23%, which indicates a challenging sales environment.

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.

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

  • 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 1.79.

Key Takeaways

Apple's low PE ratio suggests that it is undervalued compared to its peers in the Technology Hardware, Storage & Peripherals industry. The high PB and PS ratios indicate that the market is willing to pay a premium for Apple's assets and sales. Apple's high ROE, EBITDA, gross profit, and low revenue growth suggest that it is efficiently utilizing its resources and generating strong profits. Overall, Apple's valuation analysis indicates that it is a financially sound company with potential for growth in the industry.

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

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