In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 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 37.88 44.84 10.46 27.84% $39.02 $54.77 16.36%
SanDisk Corp 24.24 16.63 13.68 46.78% $7.89 $7.58 371.59%
Seagate Technology Holdings PLC 68.02 99.22 17.76 79.34% $1.64 $1.9 48.49%
Western Digital Corp 17.18 18.81 13.71 34.3% $3.36 $2.03 43.84%
Hewlett Packard Enterprise Co 33.29 3.23 2.18 5.83% $2.33 $4.9 33.68%
Everpure Inc 183.74 29.01 10.91 4.97% $0.11 $0.81 37.73%
NetApp Inc 30.37 28.25 5.83 26.35% $0.55 $1.42 29.89%
Super Micro Computer Inc 12.86 2.69 0.75 12.83% $1.57 $1.94 93.16%
Logitech International SA 18.96 6.29 3.09 10.33% $0.28 $0.61 6.93%
Diebold Nixdorf Inc 20.92 2.21 0.59 1.56% $0.09 $0.24 1.7%
Corsair Gaming Inc 44.68 2.25 1.03 1.04% $0.02 $0.1 -1.8%
Average 45.43 20.86 6.95 22.33% $1.78 $2.15 66.52%

When analyzing Apple, the following trends become evident:

  • At 37.88, the stock's Price to Earnings ratio is 0.83x less than the industry average, suggesting favorable growth potential.

  • It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 44.84 which exceeds the industry average by 2.15x.

  • With a relatively high Price to Sales ratio of 10.46, which is 1.51x the industry average, the stock might be considered overvalued based on sales performance.

  • With a Return on Equity (ROE) of 27.84% that is 5.51% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

  • The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.02 Billion, which is 21.92x above the industry average, indicating stronger profitability and robust cash flow generation.

  • The gross profit of $54.77 Billion is 25.47x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

  • With a revenue growth of 16.36%, which is much lower than the industry average of 66.52%, the company is experiencing a notable slowdown in sales expansion.

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.

By evaluating Apple against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

  • When considering the debt-to-equity ratio, Apple exhibits a stronger financial position compared to its top 4 peers.

  • 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 high PB and PS ratios suggest a premium valuation based on book value and sales. In terms of profitability, Apple shows high ROE, EBITDA, and gross profit margins, outperforming industry peers. However, the low revenue growth rate may raise concerns about future performance relative to competitors.

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