In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) against its key competitors in the Technology Hardware, Storage & Peripherals industry. By analyzing important financial metrics, market position, and growth prospects, we aim 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 | 38.87 | 46.01 | 10.73 | 27.84% | $39.02 | $54.77 | 16.36% |
| SanDisk Corp | 23.95 | 16.44 | 13.52 | 46.78% | $7.89 | $7.58 | 371.59% |
| Seagate Technology Holdings PLC | 63.11 | 92.06 | 16.47 | 79.34% | $1.64 | $1.9 | 48.49% |
| Western Digital Corp | 16.65 | 18.23 | 13.29 | 34.3% | $3.36 | $2.03 | 43.84% |
| Hewlett Packard Enterprise Co | 31.83 | 3.09 | 2.09 | 5.83% | $2.33 | $4.9 | 33.68% |
| NetApp Inc | 27.99 | 26.03 | 5.37 | 26.35% | $0.55 | $1.42 | 29.89% |
| Everpure Inc | 155.70 | 24.58 | 9.25 | 4.97% | $0.11 | $0.81 | 37.73% |
| Super Micro Computer Inc | 12.64 | 2.64 | 0.74 | 12.83% | $1.57 | $1.94 | 93.16% |
| Logitech International SA | 19.29 | 6.40 | 3.14 | 10.33% | $0.28 | $0.61 | 6.93% |
| Diebold Nixdorf Inc | 20.98 | 2.22 | 0.59 | 1.56% | $0.09 | $0.24 | 1.7% |
| Corsair Gaming Inc | 43.58 | 2.20 | 1 | 1.04% | $0.02 | $0.1 | -1.8% |
| Immersion Corp | 21.60 | 0.82 | 0.14 | 1.93% | $0.01 | $0.06 | 0.81% |
| Average | 39.76 | 17.7 | 5.96 | 20.48% | $1.62 | $1.96 | 60.55% |
After examining Apple, the following trends can be inferred:
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The stock's Price to Earnings ratio of 38.87 is lower than the industry average by 0.98x, suggesting potential value in the eyes of market participants.
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The elevated Price to Book ratio of 46.01 relative to the industry average by 2.6x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 10.73, which is 1.8x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 27.84%, which is 7.36% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.02 Billion, which is 24.09x above the industry average, implying stronger profitability and robust cash flow generation.
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With higher gross profit of $54.77 Billion, which indicates 27.94x above the industry average, the company demonstrates 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 16.36% compared to the industry average of 60.55%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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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Apple demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.78, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively 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 PB and PS ratios are high, suggesting 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 favorable financial health and operational efficiency.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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