Market Analysis: Apple And 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.

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

• The Price to Earnings ratio of 41.69 is 0.87x lower than the industry average, indicating potential undervaluation for the stock.

• With a Price to Book ratio of 67.28, which is 9.82x 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.

• The Price to Sales ratio of 9.99, which is 4.5x 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 23.83%, which is 16.47% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 85.53x above the industry average, implying stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $43.88 Billion, which indicates 54.85x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 6.07% is significantly below the industry average of 21.95%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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 1.87.

• 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 in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Apple's assets and sales highly. Apple's high ROE, EBITDA, and gross profit reflect strong profitability, while the low revenue growth may indicate a need for expansion strategies to align with industry trends.

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