In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Apple (NASDAQ:AAPL) alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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 | 40.80 | 65.84 | 9.77 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 10.67 | 1.08 | 0.91 | 5.72% | $1.23 | $2.44 | 9.7% |
| NetApp Inc | 21.78 | 26.96 | 3.86 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 69.85 | 1.89 | 1.48 | 4.28% | $0.86 | $1.55 | 48.91% |
| Pure Storage Inc | 160.49 | 14.48 | 7.25 | 4.44% | $0.08 | $0.54 | 8.81% |
| Super Micro Computer Inc | 16.05 | 3.45 | 1.30 | 6.68% | $0.4 | $0.6 | 37.87% |
| Eastman Kodak Co | 9.63 | 0.55 | 0.59 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 51.76 | 3.16 | 0.95 | 3.3% | $0.01 | $0.03 | 59.51% |
| AstroNova Inc | 26.24 | 1.09 | 0.66 | 0.26% | $0.0 | $0.01 | 7.65% |
| Average | 45.81 | 6.58 | 2.12 | 7.36% | $0.38 | $0.8 | 21.95% |
table { width: 100%; border-collapse: collapse; font-family: Arial, sans-serif; font-size: 14px; } th, td { padding: 8px; text-align: left; } th { background-color: #293a5a; color: #fff; text-align: left; } tr:nth-child(even) { background-color: #f2f4f8; } tr:hover { background-color: #e1e4ea; } td:nth-child(3), td:nth-child(5) { text-align: left; } .dividend-amount { font-weight: bold; color: #0d6efd; } .dividend-frequency { font-size: 12px; color: #6c757d; }
By carefully studying Apple, we can deduce the following trends:
A Price to Earnings ratio of 40.8 significantly below the industry average by 0.89x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 65.84, which is 10.01x 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 stock's relatively high Price to Sales ratio of 9.77, surpassing the industry average by 4.61x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 23.83% is 16.47% above the industry average, highlighting efficient use of equity to generate profits.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion is 85.53x above the industry average, highlighting stronger profitability and robust cash flow generation.
With higher gross profit of $43.88 Billion, which indicates 54.85x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
The company's revenue growth of 6.07% is significantly below the industry average of 21.95%. This suggests a potential struggle in generating increased sales volume.
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 evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
Apple falls in the middle of the list when considering the debt-to-equity ratio.
This indicates that the company has a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.87, suggesting a balanced financial structure with a reasonable debt-equitymix.
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 highly. Apple's high ROE, EBITDA, and gross profit reflect strong profitability, while the low revenue growth may indicate a need for expansion strategies to align with industry trends.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
