Market Analysis: Apple And Competitors In Technology Hardware, Storage & Peripherals Industry

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Apple AAPL in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing crucial 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.

By carefully studying Apple, we can deduce the following trends:

• The Price to Earnings ratio of 35.26 for this company is 1.19x above the industry average, indicating a premium valuation associated with the stock.

• With a Price to Book ratio of 49.98, which is 10.41x 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 8.59, which is 5.69x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 58.74% that is 50.21% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 117.72x above the industry average, implying stronger profitability and robust cash flow generation.

• The company has higher gross profit of $58.27 Billion, which indicates 73.76x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• With a revenue growth of 3.95%, which is much lower than the industry average of 22.16%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.

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 1.45.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios are all high compared to peers, indicating a potentially overvalued stock. On the other hand, Apple's high ROE, EBITDA, gross profit, and low revenue growth suggest strong profitability and operational efficiency relative to industry competitors.

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