Performance Comparison: Apple And Competitors In Technology Hardware, Storage & Peripherals Industry

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Apple AAPL against its key competitors in the Technology Hardware, Storage & Peripherals industry. By analyzing important financial metrics, market position, and growth prospects, we aim 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.

By analyzing Apple, we can infer the following trends:

• The Price to Earnings ratio of 28.17 is 0.29x lower than the industry average, indicating potential undervaluation for the stock.

• With a Price to Book ratio of 37.75, which is 5.27x 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 7.38, which is 3.42x the industry average, the stock might be considered overvalued based on sales performance.

• The company has a higher Return on Equity (ROE) of 49.79%, which is 42.81% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

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

• The gross profit of $54.85 Billion is 88.47x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• With a revenue growth of 2.07%, which is much lower than the industry average of 12.87%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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 evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

• As Apple is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 1.46 compared to the other companies.

• This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.

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 relative to industry standards. Apple's high ROE, EBITDA, and gross profit signify strong profitability, while the low revenue growth may raise concerns about future performance compared to industry peers.

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