Competitor Analysis: Evaluating 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.

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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.

Through a meticulous analysis of Apple, we can observe the following trends:

• The Price to Earnings ratio of 32.22 is 0.81x lower than the industry average, indicating potential undervaluation for the stock.

• 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 6.99x.

• The stock's relatively high Price to Sales ratio of 7.85, surpassing the industry average by 3.98x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 37.11% is 31.03% above the industry average, highlighting efficient use of equity to generate profits.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.25 Billion, which is 107.5x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $44.87 Billion, which indicates 57.53x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 5.08% is significantly below the industry average of 13.41%. 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 comparing Apple with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• As Apple is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 1.47 compared to the other companies.

• This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that Apple is efficiently utilizing its resources and generating strong profits, despite slower revenue growth. Overall, Apple's financial performance is solid, with room for potential growth in the future.

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