Understanding Apple's Position In Technology Hardware, Storage & Peripherals Industry Compared To Competitors

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 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 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.

Through a thorough examination of Apple, we can discern the following trends:

• The Price to Earnings ratio of 29.12 is 0.49x lower than the industry average, indicating potential undervaluation for the stock.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 39.01 which exceeds the industry average by 5.43x.

• The Price to Sales ratio of 7.63, which is 3.55x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 49.79% that is 42.99% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $43.22 Billion, which is 160.07x above the industry average, implying stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $54.85 Billion, which indicates 88.47x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 2.07% is significantly below the industry average of 13.07%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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:

• When evaluating the debt-to-equity ratio, Apple is in the middle position among its top 4 peers.

• The company maintains a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.46, suggesting a relatively balanced financial structure.

Key Takeaways

Apple has a low PE ratio compared to its peers in the Technology Hardware, Storage & Peripherals industry, indicating that it may be undervalued. The high PB and PS ratios suggest that the market is willing to pay a premium for Apple's assets and sales. Apple's high ROE, EBITDA, gross profit, and low revenue growth indicate that it is efficiently utilizing its resources and generating strong profits. Overall, Apple's valuation analysis suggests that it is a financially sound company in the industry.

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