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

Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Apple AAPL in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 analyzing Apple, the following trends can be observed:

• The current Price to Earnings ratio of 32.48 is 1.1x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• With a Price to Book ratio of 46.04, which is 8.97x the industry average, Apple might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• With a relatively high Price to Sales ratio of 7.91, which is 5.01x 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.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 104.34x above the industry average, implying 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 is witnessing a substantial decline in revenue growth, with a rate of 3.95% compared to the industry average of 24.23%, 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.

By analyzing Apple in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

• 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, 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. 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.