In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Apple AAPL and its primary competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 40.78 | 65.81 | 9.77 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 11.31 | 1.14 | 0.97 | 5.72% | $1.23 | $2.44 | 9.7% |
| NetApp Inc | 22.75 | 28.15 | 4.04 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 72.52 | 1.96 | 1.54 | 4.28% | $0.86 | $1.55 | 48.91% |
| Super Micro Computer Inc | 18.88 | 4.06 | 1.53 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 160.31 | 14.46 | 7.24 | 4.44% | $0.08 | $0.54 | 8.81% |
| Eastman Kodak Co | 9.60 | 0.55 | 0.59 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 57.29 | 3.50 | 1.06 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 5.07 | 1.28 | 1.80 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 29.43 | 1.22 | 0.74 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 43.02 | 6.26 | 2.17 | 7.96% | $0.34 | $0.72 | 167.32% |
By conducting a comprehensive analysis of Apple, the following trends become evident:
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With a Price to Earnings ratio of 40.78, which is 0.95x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 65.81, which is 10.51x 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 9.77, which is 4.5x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 23.83% is 15.87% above the industry average, highlighting 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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The company has higher gross profit of $43.88 Billion, which indicates 60.94x 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 167.32%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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 examining Apple in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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In terms of the debt-to-equity ratio, Apple is positioned in the middle among its top 4 peers.
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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 1.87.
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 that the market values Apple's assets and sales highly. Apple's high ROE, EBITDA, and gross profit reflect strong profitability, while the low revenue growth may indicate a need for strategic expansion to align with industry trends.
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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