Insights Into Apple's Performance Versus Peers In Technology Hardware, Storage & Peripherals Sector

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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.

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

• A Price to Earnings ratio of 39.88 significantly below the industry average by 0.74x suggests undervaluation. This can make the stock appealing for those seeking growth.

• The elevated Price to Book ratio of 59.25 relative to the industry average by 5.77x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 9.71, surpassing the industry average by 2.71x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 35.34% is 29.55% 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 $31.03 Billion, which is 86.19x above the industry average, indicating stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $43.72 Billion, which indicates 47.01x above the industry average, indicating 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 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.

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 1.54 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, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. Apple's high ROE, EBITDA, gross profit, and revenue growth reflect efficient operations and growth potential within the industry sector.

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