Industry Comparison: Evaluating Apple Against Competitors In Technology Hardware, Storage & Peripherals Industry

In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess 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.

Through a thorough examination of Apple, we can discern the following trends:

• Notably, the current Price to Earnings ratio for this stock, 31.56, is 1.08x above the industry norm, reflecting a higher valuation relative to the industry.

• The elevated Price to Book ratio of 44.75 relative to the industry average by 9.48x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 7.69, surpassing the industry average by 5.2x, may indicate an aspect of overvaluation in terms of 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 has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 117.72x above the industry average, indicating stronger profitability and robust cash flow generation.

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

• The company is witnessing a substantial decline in revenue growth, with a rate of 3.95% compared to the industry average of 22.16%, which indicates a challenging sales environment.

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.

When examining Apple in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• Compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.45, indicating a balanced financial structure.

• This suggests that the company maintains a reasonable level of debt while also leveraging equity financing.

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.