In-Depth Analysis: Apple Versus 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.

After examining Apple, the following trends can be inferred:

• With a Price to Earnings ratio of 30.33, which is 0.69x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 46.25 which exceeds the industry average by 9.09x.

• The Price to Sales ratio of 7.67, which is 5.25x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a higher Return on Equity (ROE) of 37.5%, which is 32.05% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $30.65 Billion, which is 145.95x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• With higher gross profit of $40.43 Billion, which indicates 76.28x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of -0.72% is significantly below the industry average of 4.46%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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 assessing Apple against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• 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 1.79, which implies a relatively balanced financial structure with a reasonable debt-equity mix.

Key Takeaways

Apple has a low PE ratio compared to its peers in the Technology Hardware, Storage & Peripherals industry, indicating that it may be undervalued. The high PB and PS ratios suggest that the market is willing to pay a premium for Apple's assets and sales. Apple's high ROE, EBITDA, gross profit, and low revenue growth indicate that it is efficiently utilizing its resources and generating strong profits. Overall, Apple's valuation analysis suggests that it is a financially sound company in the industry.

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