Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical 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.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Apple Inc 36.92 42.06 10.02 30.39% $39.32 $54.78 16.6%
SanDisk Corp 52.71 16.58 17.75 30.14% $4.15 $4.66 251.03%
Seagate Technology Holdings PLC 76.89 165.96 16.58 96.27% $1.0 $1.45 44.07%
Western Digital Corp 29.11 17.32 15.54 37.73% $3.49 $1.68 45.47%
Everpure Inc 143.64 18.15 7.40 7.04% $0.15 $0.74 20.35%
NetApp Inc 20.80 21.12 3.75 31.16% $0.51 $1.21 4.39%
IonQ Inc 151 4.42 99.44 17.93% $-0.23 $0.02 754.72%
Super Micro Computer Inc 17.61 2.66 0.66 6.64% $0.7 $1.02 122.68%
Diebold Nixdorf Inc 24.97 2.45 0.69 0.47% $0.07 $0.21 6.03%
Corsair Gaming Inc 76.80 1.14 0.51 1.85% $0.03 $0.12 -4.12%
Turtle Beach Corp 556 1.97 0.75 -12.65% $-0.01 $0.01 -34.0%
Average 114.95 25.18 16.31 21.66% $0.99 $1.11 121.06%

Upon closer analysis of Apple, the following trends become apparent:

  • The Price to Earnings ratio of 36.92 is 0.32x lower than the industry average, indicating potential undervaluation for the stock.

  • With a Price to Book ratio of 42.06, which is 1.67x 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 is 10.02, which is 0.61x the industry average. This suggests a possible undervaluation based on sales performance.

  • With a Return on Equity (ROE) of 30.39% that is 8.73% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

  • The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.32 Billion, which is 39.72x above the industry average, implying stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $54.78 Billion, which indicates 49.35x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company is witnessing a substantial decline in revenue growth, with a rate of 16.6% compared to the industry average of 121.06%, which indicates a challenging sales environment.

Debt To Equity Ratio

debt to equity

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.

By analyzing Apple in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

  • Apple has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.8.

  • This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB ratio suggests the market values Apple's assets highly. With a low PS ratio, Apple's sales are relatively inexpensive. Apple's high ROE, EBITDA, and gross profit reflect strong profitability. However, the low revenue growth may raise concerns about future performance compared to industry peers.

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