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

• With a Price to Earnings ratio of 31.4, which is 0.67x 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 48.17, which is 8.99x 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.

• The stock's relatively high Price to Sales ratio of 7.94, surpassing the industry average by 5.16x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 37.5%, which is 31.7% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $30.65 Billion, which is 133.26x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $40.43 Billion, which indicates 68.53x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of -0.72% is significantly lower compared to the industry average of 1.12%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

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:

• Among its top 4 peers, Apple is placed in the middle with a moderate debt-to-equity ratio of 1.79.

• This implies a balanced financial structure, with a reasonable proportion of debt and equity.

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, and gross profit ratios demonstrate its strong profitability and efficiency. However, the low revenue growth suggests that Apple's sales growth is slower compared to its industry peers.

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