In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market standing, and growth prospects, our objective 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 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 | 38.26 | 45.29 | 10.56 | 27.84% | $39.02 | $54.77 | 16.36% |
| SanDisk Corp | 22.51 | 15.45 | 12.71 | 46.78% | $7.89 | $7.58 | 371.59% |
| Seagate Technology Holdings PLC | 57.96 | 84.54 | 15.13 | 79.34% | $1.64 | $1.9 | 48.49% |
| Western Digital Corp | 15.27 | 17.36 | 12.19 | 34.3% | $3.36 | $2.03 | 43.84% |
| Hewlett Packard Enterprise Co | 36.33 | 3.53 | 2.38 | 5.83% | $2.33 | $4.9 | 33.68% |
| Everpure Inc | 201.64 | 31.83 | 11.98 | 4.97% | $0.11 | $0.81 | 37.73% |
| NetApp Inc | 32.27 | 30.01 | 6.19 | 26.35% | $0.55 | $1.42 | 29.89% |
| Super Micro Computer Inc | 13.33 | 2.78 | 0.78 | 12.83% | $1.57 | $1.94 | 93.16% |
| Logitech International SA | 18.80 | 6.24 | 3.07 | 10.33% | $0.28 | $0.61 | 6.93% |
| Diebold Nixdorf Inc | 21.68 | 2.29 | 0.61 | 1.56% | $0.09 | $0.24 | 1.7% |
| Corsair Gaming Inc | 44.03 | 2.22 | 1.01 | 1.04% | $0.02 | $0.1 | -1.8% |
| Immersion Corp | 21.09 | 0.80 | 0.14 | 1.93% | $0.01 | $0.06 | 0.81% |
| Average | 44.08 | 17.91 | 6.02 | 20.48% | $1.62 | $1.96 | 60.55% |
Through an analysis of Apple, we can infer the following trends:
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The stock's Price to Earnings ratio of 38.26 is lower than the industry average by 0.87x, suggesting potential value in the eyes of market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 45.29 which exceeds the industry average by 2.53x.
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With a relatively high Price to Sales ratio of 10.56, which is 1.75x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 27.84% that is 7.36% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $39.02 Billion, which is 24.09x above the industry average, indicating 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's revenue growth of 16.36% is significantly below the industry average of 60.55%. This suggests a potential struggle in generating increased sales volume.
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 assessing Apple against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Apple exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.78.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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 and PS ratios suggest that the market values the company's assets and sales highly. In terms of ROE, EBITDA, and gross profit, Apple demonstrates strong performance compared to industry peers. However, the low revenue growth rate may be a concern for long-term prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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