In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 accounts for the majority of the firm's sales, and Apple's other products, such as the 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, such as streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors and works with subcontractors such as Foxconn and TSMC to build its products and chips. Slightly less than half of Apple's sales come directly through its flagship stores, with the majority 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 35.01 41.43 9.66 27.84% $39.02 $54.77 16.36%
Seagate Technology Holdings PLC 66.29 96.37 17.30 79.34% $1.64 $1.9 48.49%
Western Digital Corp 20.07 18.95 14.45 34.46% $3.49 $1.68 12.29%
Hewlett Packard Enterprise Co 55.91 3.13 2.07 2.38% $1.7 $3.9 40.0%
NetApp Inc 32.28 29.78 5.95 32.2% $0.59 $1.36 12.47%
Everpure Inc 177.80 27.05 10.35 1.67% $0.07 $0.72 35.25%
Super Micro Computer Inc 20.61 3.34 0.77 6.64% $0.7 $1.02 122.68%
Logitech International SA 19.18 6.36 3.13 10.33% $0.28 $0.61 6.93%
Diebold Nixdorf Inc 23.92 2.53 0.67 1.56% $0.09 $0.24 1.7%
Corsair Gaming Inc 43.39 2.19 1 1.04% $0.02 $0.1 -1.8%
Immersion Corp 53.29 0.83 0.14 1.26% $0.02 $1.36 -5.22%
Average 51.27 19.05 5.58 17.09% $0.86 $1.29 27.28%

After a detailed analysis of Apple, the following trends become apparent:

  • At 35.01, the stock's Price to Earnings ratio is 0.68x less than the industry average, suggesting favorable growth potential.

  • With a Price to Book ratio of 41.43, which is 2.17x 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 Price to Sales ratio of 9.66, which is 1.73x 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 27.84%, which is 10.75% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

  • Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.02 Billion, which is 45.37x above the industry average, indicating stronger profitability and robust cash flow generation.

  • The company has higher gross profit of $54.77 Billion, which indicates 42.46x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company is witnessing a substantial decline in revenue growth, with a rate of 16.36% compared to the industry average of 27.28%, which indicates a challenging sales environment.

Debt To Equity Ratio

debt to equity

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.

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 comparing Apple with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

  • Apple has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.78.

  • This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. However, the PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, and gross profit, Apple demonstrates strong performance with high figures, reflecting efficient operations and profitability. Despite this, the low revenue growth rate may raise concerns about the company's ability to sustain long-term growth compared to industry peers.

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