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 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 | 38.30 | 61.81 | 9.18 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 15.75 | 1.31 | 1.01 | 2.34% | $1.23 | $2.44 | 10.11% |
| Western Digital Corp | 76.29 | 2.06 | 1.62 | 4.28% | $0.86 | $1.55 | 48.91% |
| Super Micro Computer Inc | 19.12 | 4.11 | 1.55 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 124.41 | 12.12 | 6.24 | 2.52% | $0.08 | $0.54 | 10.91% |
| Eastman Kodak Co | 8.93 | 0.51 | 0.54 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 54.74 | 3.35 | 1.01 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 5.04 | 1.27 | 1.79 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 17.69 | 1.22 | 0.75 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 40.25 | 3.24 | 1.81 | 4.19% | $0.33 | $0.66 | 187.78% |
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When conducting a detailed analysis of Apple, the following trends become clear:
A Price to Earnings ratio of 38.3 significantly below the industry average by 0.95x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 61.81, which is 19.08x 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.
The Price to Sales ratio of 9.18, which is 5.07x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 23.83% is 19.64% above the industry average, highlighting efficient use of equity to generate profits.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 98.48x above the industry average, indicating stronger profitability and robust cash flow generation.
The gross profit of $43.88 Billion is 66.48x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
The company's revenue growth of 6.07% is significantly lower compared to the industry average of 187.78%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.
By evaluating Apple against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
Compared to its top 4 peers, Apple has a higher debt-to-equity ratio of 1.87, indicating a higher level of debt financing.
This higher debt proportion can expose the company to increased financial risk and potential challenges.
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 Apple's assets and sales more than its earnings. Apple's high ROE, EBITDA, and gross profit reflect strong profitability and operational efficiency. However, the low revenue growth implies slower expansion compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
