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 (NASDAQ: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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 39.97 | 64.51 | 9.58 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 11.22 | 1.13 | 0.96 | 2.34% | $1.23 | $2.44 | 10.11% |
| NetApp Inc | 23.72 | 29.35 | 4.21 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 79.24 | 2.14 | 1.68 | 4.28% | $0.86 | $1.55 | 48.91% |
| Super Micro Computer Inc | 20.48 | 4.40 | 1.66 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 160.41 | 14.53 | 7.24 | 4.44% | $0.08 | $0.54 | 8.81% |
| Eastman Kodak Co | 9.77 | 0.56 | 0.60 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 58.06 | 3.55 | 1.07 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 5.01 | 1.26 | 1.78 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 18.77 | 1.29 | 0.80 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 42.96 | 6.47 | 2.22 | 7.59% | $0.34 | $0.72 | 167.37% |
By analyzing Apple, we can infer the following trends:
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With a Price to Earnings ratio of 39.97, which is 0.93x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 64.51, which is 9.97x 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.
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The Price to Sales ratio of 9.58, which is 4.32x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 23.83% is 16.24% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 95.59x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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The company has higher gross profit of $43.88 Billion, which indicates 60.94x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 6.07% compared to the industry average of 167.37%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.
In terms of the Debt-to-Equity ratio, Apple stands in comparison with its top 4 peers, leading to the following comparisons:
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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 1.87 compared to the other companies.
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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 ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. Apple's high ROE, EBITDA, and gross profit signify strong profitability, while the low revenue growth implies slower expansion compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
