In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess 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 | 35.18 | 40.07 | 9.55 | 30.39% | $39.32 | $54.78 | 16.6% |
| SanDisk Corp | 56.27 | 17.70 | 18.95 | 30.14% | $4.15 | $4.66 | 251.03% |
| Seagate Technology Holdings PLC | 80.27 | 174.81 | 17.31 | 96.27% | $1.0 | $1.45 | 44.07% |
| Western Digital Corp | 30.98 | 18.43 | 16.54 | 37.73% | $3.49 | $1.68 | 45.47% |
| Hewlett Packard Enterprise Co | 45.11 | 2.53 | 1.67 | 1.71% | $1.46 | $3.34 | 18.42% |
| NetApp Inc | 25.98 | 23.93 | 4.79 | 32.2% | $0.59 | $1.36 | 12.47% |
| Super Micro Computer Inc | 21.39 | 3.23 | 0.80 | 6.64% | $0.7 | $1.02 | 122.68% |
| Everpure Inc | 106.06 | 16.13 | 6.17 | 1.67% | $0.07 | $0.72 | 35.25% |
| IonQ Inc | 145.36 | 4.25 | 95.73 | 17.93% | $-0.23 | $0.02 | 754.72% |
| Logitech International SA | 23.54 | 7.34 | 3.46 | 6.31% | $0.16 | $0.48 | 7.44% |
| Diebold Nixdorf Inc | 28.14 | 2.76 | 0.78 | 0.47% | $0.07 | $0.21 | 6.03% |
| Corsair Gaming Inc | 93.39 | 1.39 | 0.62 | 1.85% | $0.03 | $0.12 | -4.12% |
| Turtle Beach Corp | 654 | 2.32 | 0.89 | -12.65% | $-0.01 | $0.01 | -34.0% |
| Average | 109.21 | 22.9 | 13.98 | 18.36% | $0.96 | $1.26 | 104.96% |
When conducting a detailed analysis of Apple, the following trends become clear:
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The stock's Price to Earnings ratio of 35.18 is lower than the industry average by 0.32x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 40.07, which is 1.75x 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.
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With a relatively low Price to Sales ratio of 9.55, which is 0.68x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 30.39%, which is 12.03% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.32 Billion, which is 40.96x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $54.78 Billion is 43.48x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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With a revenue growth of 16.6%, which is much lower than the industry average of 104.96%, the company is experiencing a notable slowdown in sales expansion.
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 examining Apple in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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When comparing the debt-to-equity ratio, Apple is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.8.
Key Takeaways
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB ratio suggests the market values Apple's assets highly. With a low PS ratio, Apple's sales are relatively inexpensive. Apple's high ROE, EBITDA, and gross profit reflect strong profitability. However, the low revenue growth may raise concerns about future performance compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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