In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) against its key competitors in the Technology Hardware, Storage & Peripherals industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 36.24 | 54.18 | 9.75 | 39.36% | $35.55 | $48.34 | 7.94% |
| Western Digital Corp | 21.16 | 8.72 | 5.40 | 20.57% | $1.48 | $1.23 | 27.4% |
| Pure Storage Inc | 240.73 | 24.60 | 10.03 | 3.68% | $0.09 | $0.6 | 12.73% |
| Hewlett Packard Enterprise Co | 28.73 | 1.32 | 0.98 | 1.14% | $1.11 | $2.67 | 18.5% |
| Super Micro Computer Inc | 30.93 | 4.90 | 1.49 | 3.08% | $0.26 | $0.54 | 7.51% |
| NetApp Inc | 20.85 | 24.11 | 3.70 | 23.13% | $0.38 | $1.1 | 1.17% |
| Logitech International SA | 27.40 | 8.50 | 3.86 | 7.99% | $0.22 | $0.51 | 6.27% |
| Turtle Beach Corp | 17.24 | 2.86 | 0.99 | -2.47% | $0.0 | $0.02 | -25.76% |
| Average | 55.29 | 10.72 | 3.78 | 8.16% | $0.51 | $0.95 | 6.83% |
When analyzing Apple, the following trends become evident:
The stock's Price to Earnings ratio of 36.24 is lower than the industry average by 0.66x, suggesting potential value in the eyes of market participants.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 54.18 which exceeds the industry average by 5.05x.
The stock's relatively high Price to Sales ratio of 9.75, surpassing the industry average by 2.58x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 39.36% is 31.2% above the industry average, highlighting efficient use of equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 69.71x above the industry average, implying stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $48.34 Billion, which indicates 50.88x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 7.94% exceeds the industry average of 6.83%, indicating strong sales performance and market outperformance.
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 analyzing Apple in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
When compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.34.
This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.
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.