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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 37.66 | 60.78 | 9.02 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 15.02 | 1.25 | 0.96 | 2.34% | $1.23 | $2.44 | 10.11% |
| NetApp Inc | 24.16 | 27.21 | 4.10 | 23.9% | $0.38 | $1.1 | 7.61% |
| Western Digital Corp | 70.15 | 1.90 | 1.49 | 4.28% | $0.86 | $1.55 | 48.91% |
| Pure Storage Inc | 115.25 | 11.23 | 5.78 | 2.52% | $0.08 | $0.54 | 10.91% |
| Super Micro Computer Inc | 12.84 | 2.76 | 1.04 | 6.68% | $0.4 | $0.6 | 37.87% |
| Eastman Kodak Co | 7.84 | 0.45 | 0.48 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 47.87 | 2.93 | 0.88 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 4.63 | 1.17 | 1.65 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 17.31 | 1.19 | 0.73 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 35.01 | 5.57 | 1.9 | 6.38% | $0.34 | $0.71 | 167.76% |
By analyzing Apple, we can infer the following trends:
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The current Price to Earnings ratio of 37.66 is 1.08x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 60.78 which exceeds the industry average by 10.91x.
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With a relatively high Price to Sales ratio of 9.02, which is 4.75x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 23.83% that is 17.45% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 95.59x above the industry average, implying stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $43.88 Billion, which indicates 61.8x above the industry average, indicating 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 167.76%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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.
When evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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 1.87 compared to the other companies.
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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, 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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