In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) vis-à-vis its key competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal 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 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 | 39.41 | 63.59 | 9.44 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 15.07 | 1.25 | 0.97 | 2.34% | $1.23 | $2.44 | 10.11% |
| Western Digital Corp | 80.69 | 2.18 | 1.71 | 4.28% | $0.86 | $1.55 | 48.91% |
| NetApp Inc | 22.71 | 28.10 | 4.03 | 32.84% | $0.44 | $1.18 | 6.15% |
| Super Micro Computer Inc | 20.91 | 4.50 | 1.69 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 122.79 | 11.96 | 6.16 | 2.52% | $0.08 | $0.54 | 10.91% |
| Eastman Kodak Co | 10.31 | 0.59 | 0.63 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 58.74 | 3.59 | 1.08 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 4.96 | 1.25 | 1.77 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 18.18 | 1.25 | 0.77 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 39.37 | 6.07 | 2.09 | 7.37% | $0.34 | $0.72 | 167.6% |
When analyzing Apple, the following trends become evident:
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The Price to Earnings ratio of 39.41 for this company is 1.0x above the industry average, indicating a premium valuation associated with the stock.
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The elevated Price to Book ratio of 63.59 relative to the industry average by 10.48x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 9.44, which is 4.52x the industry average, the stock might be considered overvalued based on 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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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 95.59x above the industry average, the company demonstrates 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's revenue growth of 6.07% is significantly lower compared to the industry average of 167.6%. This indicates a potential fall in the company's sales performance.
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 evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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Apple is positioned in the middle in terms of the debt-to-equity ratio compared to its top 4 peers.
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This suggests a balanced financial structure, where the company maintains a moderate level of debt while also relying 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.
