Evaluating Apple Against Peers 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.

Through a detailed examination of Apple, we can deduce the following trends:

• Notably, the current Price to Earnings ratio for this stock, 31.27, is 1.08x 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 44.32 which exceeds the industry average by 8.86x.

• With a relatively high Price to Sales ratio of 7.62, which is 4.95x the industry average, the stock might be considered overvalued based on sales performance.

• The company has a higher Return on Equity (ROE) of 58.74%, which is 49.03% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 104.34x above the industry average, indicating stronger profitability and robust cash flow generation.

• The gross profit of $58.27 Billion is 64.74x above that of its industry, highlighting 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 24.23%, 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.

In terms of the Debt-to-Equity ratio, Apple stands in comparison with its top 4 peers, leading to the following comparisons:

• Among its top 4 peers, Apple is placed in the middle with a moderate debt-to-equity ratio of 1.45.

• This implies a balanced financial structure, with a reasonable proportion of debt and equity.

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 its industry competitors.

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