Investigating Apple's Standing In Technology Hardware, Storage & Peripherals Industry Compared To Competitors

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Apple AAPL vis-à-vis its key competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 closer analysis of Apple, the following trends become apparent:

• The stock's Price to Earnings ratio of 30.47 is lower than the industry average by 0.87x, suggesting potential value in the eyes of market participants.

• With a Price to Book ratio of 43.75, which is 6.71x 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 7.43, which is 3.89x 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 37.11%, which is 32.35% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.25 Billion, which is 129.0x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $44.87 Billion, which indicates 59.04x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 5.08% is significantly below the industry average of 12.29%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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:

• Apple is positioned in the middle in terms of the debt-to-equity ratio compared to its top 4 peers.

• This suggests a balanced financial structure, where the company maintains a moderate level of debt while also relying on equity financing with a debt-to-equity ratio of 1.47.

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.