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

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.

By conducting a comprehensive analysis of Apple, the following trends become evident:

• The Price to Earnings ratio of 31.45 for this company is 1.16x above the industry average, indicating a premium valuation associated with the stock.

• The elevated Price to Book ratio of 44.59 relative to the industry average by 10.0x suggests company might be overvalued based on its book value.

• With a relatively high Price to Sales ratio of 7.66, which is 5.51x 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.

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

• Compared to its industry, 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 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.

In terms of the Debt-to-Equity ratio, Apple can be assessed by comparing it to its top 4 peers, resulting in the following observations:

• When compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.45.

• This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.

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 that the stock may be overvalued. 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.