In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 38.64 | 62.36 | 9.26 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 14.75 | 1.22 | 0.95 | 2.34% | $1.23 | $2.44 | 10.11% |
| NetApp Inc | 22.55 | 27.90 | 4 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 78.57 | 2.12 | 1.67 | 4.28% | $0.86 | $1.55 | 48.91% |
| Super Micro Computer Inc | 17.46 | 3.75 | 1.41 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 122.45 | 11.93 | 6.14 | 2.52% | $0.08 | $0.54 | 10.91% |
| Eastman Kodak Co | 10.20 | 0.58 | 0.62 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 54.55 | 3.33 | 1.01 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 4.90 | 1.23 | 1.74 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 17.88 | 1.23 | 0.76 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 38.15 | 5.92 | 2.03 | 7.37% | $0.34 | $0.72 | 167.6% |
When conducting a detailed analysis of Apple, the following trends become clear:
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At 38.64, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.01x, suggesting a premium valuation relative to industry peers.
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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 62.36 which exceeds the industry average by 10.53x.
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The stock's relatively high Price to Sales ratio of 9.26, surpassing the industry average by 4.56x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 23.83% is 16.46% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion is 95.59x 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 $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 167.6%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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 comparing Apple with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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Apple holds a middle position in terms of the debt-to-equity ratio compared to its top 4 peers.
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This indicates a balanced financial structure with a moderate level of debt and an appropriate reliance on equity financing with a debt-to-equity ratio of 1.87.
Key Takeaways
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios are all high compared to its peers, indicating that the stock may be overvalued. On the other hand, Apple's high ROE, EBITDA, gross profit, and low revenue growth suggest strong profitability and operational efficiency relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
