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 (NASDAQ: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 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 | 36.66 | 43.39 | 10.12 | 27.84% | $39.02 | $54.77 | 16.36% |
| SanDisk Corp | 20.13 | 13.82 | 11.37 | 46.78% | $7.89 | $7.58 | 371.59% |
| Seagate Technology Holdings PLC | 59.69 | 86.78 | 15.58 | 79.34% | $1.64 | $1.9 | 48.49% |
| Western Digital Corp | 17.07 | 18.69 | 13.62 | 34.3% | $3.36 | $2.03 | 43.84% |
| Hewlett Packard Enterprise Co | 48.89 | 2.74 | 1.81 | 2.38% | $1.7 | $3.9 | 40.0% |
| NetApp Inc | 29.47 | 27.18 | 5.43 | 32.2% | $0.59 | $1.36 | 12.47% |
| Everpure Inc | 127.95 | 20.15 | 7.60 | 4.97% | $0.07 | $0.72 | 12.63% |
| Super Micro Computer Inc | 11.37 | 2.34 | 0.66 | 13.07% | $0.7 | $1.02 | 8.56% |
| Logitech International SA | 17.97 | 5.96 | 2.93 | 10.33% | $0.28 | $0.61 | 6.93% |
| Diebold Nixdorf Inc | 22.30 | 2.36 | 0.63 | 1.56% | $0.09 | $0.24 | 1.7% |
| Corsair Gaming Inc | 38.77 | 1.96 | 0.89 | 1.04% | $0.02 | $0.1 | -1.8% |
| Immersion Corp | 54.64 | 0.85 | 0.15 | 1.26% | $0.02 | $1.36 | -5.22% |
| Average | 40.75 | 16.62 | 5.52 | 20.66% | $1.49 | $1.89 | 49.02% |
By closely studying Apple, we can observe the following trends:
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The stock's Price to Earnings ratio of 36.66 is lower than the industry average by 0.9x, suggesting potential value in the eyes of market participants.
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The elevated Price to Book ratio of 43.39 relative to the industry average by 2.61x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 10.12, which is 1.83x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 27.84% is 7.18% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.02 Billion, which is 26.19x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $54.77 Billion, which indicates 28.98x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 16.36% is significantly below the industry average of 49.02%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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:
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When considering the debt-to-equity ratio, Apple exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.78, which can be perceived as a positive aspect by investors.
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 operational efficiency.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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