Analyzing Apple In Comparison To Competitors In Technology Hardware, Storage & Peripherals Industry

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 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 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.

By carefully studying Apple, we can deduce the following trends:

• The stock's Price to Earnings ratio of 41.99 is lower than the industry average by 0.92x, suggesting potential value in the eyes of market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 67.75 which exceeds the industry average by 10.25x.

• With a relatively high Price to Sales ratio of 10.06, which is 4.7x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 23.83% that is 16.47% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 67.71x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $43.88 Billion, which indicates 53.51x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• With a revenue growth of 6.07%, which is much lower than the industry average of 22.62%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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:

• Apple holds a middle position in terms of the debt-to-equity ratio compared to its top 4 peers.

• This indicates a balanced financial structure with a moderate level of debt and an appropriate reliance on equity financing with a debt-to-equity ratio of 1.87.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that Apple is efficiently utilizing its resources and generating strong profits, despite slower revenue growth. Overall, Apple's financial performance is solid, with room for potential growth in the future.

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