In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Apple AAPL and its primary competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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.

Upon a comprehensive analysis of Apple, the following trends can be discerned:

• The Price to Earnings ratio of 37.03 for this company is 1.06x above the industry average, indicating a premium valuation associated with the stock.

• With a Price to Book ratio of 59.75, which is 11.02x 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.

• With a relatively high Price to Sales ratio of 8.87, which is 4.77x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 23.83% that is 18.46% 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 $32.5 Billion, which is 95.59x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $43.88 Billion, which indicates 61.8x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company’s revenue growth of 6.07% is significantly lower compared to the industry average of 167.03%. This indicates a potential fall in the company’s sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.

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:

• Apple falls in the middle of the list when considering the debt-to-equity ratio.

• This indicates that the company has a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.87, suggesting a balanced financial structure with a reasonable debt-equitymix.

Key Takeaways

For Apple, the PE, PB, and PS ratios are all high compared to its peers in the Technology Hardware, Storage & Peripherals industry, indicating that the stock may be overvalued based on these metrics. On the other hand, Apple’s high ROE, EBITDA, gross profit, and low revenue growth suggest that the company is efficiently utilizing its resources and generating strong profits, despite slower revenue growth compared to industry peers.

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