Investigating Apple's Standing In Technology Hardware, Storage & Peripherals Industry Compared To Competitors

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.

Upon closer analysis of Apple, the following trends become apparent:

• At 35.99, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.12x, suggesting a premium valuation relative to industry peers.

• With a Price to Book ratio of 53.9, which is 7.6x 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.

• The stock's relatively high Price to Sales ratio of 9.52, surpassing the industry average by 4.05x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 30.44%, which is 23.21% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $28.2 Billion, which is 90.97x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• The company has higher gross profit of $39.68 Billion, which indicates 57.51x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• With a revenue growth of 4.87%, which is much lower than the industry average of 199.28%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

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 considering the Debt-to-Equity ratio, Apple can be compared to its top 4 peers, leading to the following observations:

• In terms of the debt-to-equity ratio, Apple is positioned in the middle among its top 4 peers.

• This suggests a relatively balanced financial structure, where the company maintains a moderate level of debt while also utilizing equity financing with a debt-to-equity ratio of 1.52.

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.