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

In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Apple AAPL against its key competitors in the Technology Hardware, Storage & Peripherals industry. By examining key 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.

Upon a comprehensive analysis of Apple, the following trends can be discerned:

• The current Price to Earnings ratio of 31.7 is 1.12x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• The elevated Price to Book ratio of 44.95 relative to the industry average by 9.12x suggests company might be overvalued based on its book value.

• With a relatively high Price to Sales ratio of 7.72, which is 5.11x the industry average, the stock might be considered overvalued based on sales performance.

• The Return on Equity (ROE) of 58.74% is 49.03% above the industry average, highlighting efficient use of equity to generate profits.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 104.34x 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 64.74x above the industry average, indicating 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 24.23%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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 evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

• In the context of the debt-to-equity ratio, Apple holds a middle position among its top 4 peers.

• This indicates a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.45, which implies a relatively balanced financial structure with a reasonable debt-equity mix.

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.