Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Apple AAPL in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 37.54 | 60.57 | 8.99 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 15.13 | 1.26 | 0.97 | 2.34% | $1.23 | $2.44 | 10.11% |
| NetApp Inc | 23.11 | 26.03 | 3.93 | 23.9% | $0.38 | $1.1 | 7.61% |
| Western Digital Corp | 69.47 | 1.88 | 1.47 | 4.28% | $0.86 | $1.55 | 48.91% |
| Pure Storage Inc | 115.36 | 11.24 | 5.79 | 2.52% | $0.08 | $0.54 | 10.91% |
| Super Micro Computer Inc | 8.96 | 1.93 | 0.73 | 6.68% | $0.4 | $0.6 | 37.87% |
| Eastman Kodak Co | 8.14 | 0.38 | 0.39 | 2.09% | $0.05 | $0.06 | -9.49% |
| Turtle Beach Corp | 49.23 | 3.01 | 0.91 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 4.76 | 1.20 | 1.69 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 16.95 | 1.17 | 0.72 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 34.57 | 5.34 | 1.84 | 6.46% | $0.34 | $0.71 | 167.04% |
By analyzing Apple, we can infer the following trends:
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Notably, the current Price to Earnings ratio for this stock, 37.54, is 1.09x above the industry norm, reflecting a higher valuation relative to the industry.
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With a Price to Book ratio of 60.57, which is 11.34x 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.
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With a relatively high Price to Sales ratio of 8.99, which is 4.89x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 23.83%, which is 17.37% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 95.59x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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With higher gross profit of $43.88 Billion, which indicates 61.8x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 6.07% compared to the industry average of 167.04%, which indicates a challenging sales environment.
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.
In light of the Debt-to-Equity ratio, a comparison between Apple and its top 4 peers reveals the following information:
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In the context of the debt-to-equity ratio, Apple holds a middle position among its top 4 peers.
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This indicates a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.87, which implies a relatively balanced financial structure with a reasonable debt-equity mix.
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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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