Comparing Apple With Industry Competitors In Technology Hardware, Storage & Peripherals Industry

In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Apple AAPL alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.

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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.

After a detailed analysis of Apple, the following trends become apparent:

• The current Price to Earnings ratio of 33.22 is 1.05x 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 47.09 relative to the industry average by 8.69x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 8.09, surpassing the industry average by 4.84x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 58.74% that is 49.03% above the industry average, it appears that the company exhibits 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.

• 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.

• The company's revenue growth of 3.95% is significantly below the industry average of 24.23%. This suggests a potential struggle in generating increased sales volume.

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.

By considering the Debt-to-Equity ratio, Apple can be compared to its top 4 peers, leading to 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, 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.