Analyzing Apple In Comparison To Competitors In Technology Hardware, Storage & Peripherals Industry

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.

By closely examining Apple, we can identify the following trends:

• Notably, the current Price to Earnings ratio for this stock, 29.9, is 1.21x above the industry norm, reflecting a higher valuation relative to the industry.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 42.39 which exceeds the industry average by 10.42x.

• The stock's relatively high Price to Sales ratio of 7.28, surpassing the industry average by 5.78x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 58.74%, which is 50.21% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

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

• The gross profit of $58.27 Billion is 73.76x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 3.95% is significantly lower compared to the industry average of 22.16%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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:

• 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 1.45 compared to the other companies.

• 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 in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios are all high compared to its 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.