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 accounts for the majority of the firm's sales, and Apple's other products, such as the 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, such as streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors and works with subcontractors such as Foxconn and TSMC to build its products and chips. Slightly less than half of Apple's sales come directly through its flagship stores, with the majority 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 | 38.42 | 43.76 | 10.43 | 30.39% | $39.32 | $54.78 | 16.6% |
| SanDisk Corp | 57.21 | 17.99 | 19.27 | 30.14% | $4.15 | $4.66 | 251.03% |
| Seagate Technology Holdings PLC | 81.66 | 177.83 | 17.61 | 96.27% | $1.0 | $1.45 | 44.07% |
| Western Digital Corp | 33.25 | 19.78 | 17.75 | 37.73% | $3.49 | $1.68 | 45.47% |
| Hewlett Packard Enterprise Co | 44.15 | 2.47 | 1.63 | 2.38% | $1.7 | $3.9 | 40.0% |
| NetApp Inc | 25.82 | 23.77 | 4.76 | 32.2% | $0.59 | $1.36 | 12.47% |
| Everpure Inc | 114.18 | 17.37 | 6.65 | 1.67% | $0.07 | $0.72 | 35.25% |
| Super Micro Computer Inc | 14.56 | 2.36 | 0.55 | 6.64% | $0.7 | $1.02 | 122.68% |
| Logitech International SA | 21.30 | 6.63 | 3.13 | 6.31% | $0.16 | $0.48 | 7.44% |
| IonQ Inc | 99.69 | 2.92 | 65.65 | 17.93% | $-0.23 | $0.02 | 754.72% |
| Diebold Nixdorf Inc | 29.53 | 2.90 | 0.82 | 0.47% | $0.07 | $0.21 | 6.03% |
| Corsair Gaming Inc | 105.22 | 1.56 | 0.69 | 1.85% | $0.03 | $0.12 | -4.12% |
| Turtle Beach Corp | 643 | 2.28 | 0.87 | -12.65% | $-0.01 | $0.01 | -34.0% |
| Average | 105.8 | 23.16 | 11.62 | 18.41% | $0.98 | $1.3 | 106.75% |
By carefully studying Apple, we can deduce the following trends:
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At 38.42, the stock's Price to Earnings ratio is 0.36x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 43.76, which is 1.89x 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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With a relatively low Price to Sales ratio of 10.43, which is 0.9x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 30.39%, which is 11.98% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.32 Billion is 40.12x above the industry average, highlighting stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $54.78 Billion, which indicates 42.14x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 16.6% is significantly below the industry average of 106.75%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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 assessing Apple against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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In terms of the debt-to-equity ratio, Apple has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.8.
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. A low PS ratio implies that investors are paying less for each dollar of Apple's sales. Apple's high ROE, EBITDA, and gross profit reflect strong profitability and operational efficiency. 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.
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