Understanding Apple's Position In Technology Hardware, Storage & Peripherals Industry Compared To Competitors

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 (NASDAQ: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.

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

• The Price to Earnings ratio of 38.28 is 0.72x lower than the industry average, indicating potential undervaluation for the stock.

• With a Price to Book ratio of 56.88, which is 5.57x 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 9.32, which is 2.63x 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 35.34%, which is 29.55% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.03 Billion is 86.19x above the industry average, highlighting stronger profitability and robust cash flow generation.

• With higher gross profit of $43.72 Billion, which indicates 47.01x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• With a revenue growth of 9.63%, which surpasses the industry average of 7.09%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative 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.

When examining Apple in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• 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 1.54.

Key Takeaways

For Apple, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest overvaluation relative to industry standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Apple demonstrates strong performance compared to its industry peers, reflecting robust financial health and growth potential.

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