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 | 37.83 | 60.73 | 9.06 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 11.99 | 1.23 | 1.03 | 5.72% | $1.44 | $2.61 | 15.06% |
| NetApp Inc | 22.48 | 27.83 | 3.99 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 71.47 | 1.93 | 1.52 | 4.28% | $0.86 | $1.55 | 48.91% |
| Pure Storage Inc | 170 | 15.33 | 7.67 | 4.44% | $0.11 | $0.58 | 8.94% |
| Super Micro Computer Inc | 15.34 | 3.30 | 1.24 | 6.68% | $0.4 | $0.6 | 37.87% |
| Eastman Kodak Co | 10.40 | 0.60 | 0.63 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 58.97 | 3.60 | 1.09 | 3.3% | $0.01 | $0.03 | 59.51% |
| AstroNova Inc | 23.65 | 0.99 | 0.60 | 0.26% | $0.0 | $0.01 | 7.65% |
| Average | 48.04 | 6.85 | 2.22 | 7.36% | $0.41 | $0.82 | 22.64% |
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When closely examining Apple, the following trends emerge:
A Price to Earnings ratio of 37.83 significantly below the industry average by 0.79x suggests undervaluation. This can make the stock appealing for those seeking growth.
The elevated Price to Book ratio of 60.73 relative to the industry average by 8.87x suggests company might be overvalued based on its book value.
With a relatively high Price to Sales ratio of 9.06, which is 4.08x the industry average, the stock might be considered overvalued based on sales performance.
The company has a higher Return on Equity (ROE) of 23.83%, which is 16.47% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 79.27x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $43.88 Billion, which indicates 53.51x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 6.07% is significantly below the industry average of 22.64%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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:
When evaluating the debt-to-equity ratio, Apple is in the middle position among its top 4 peers.
The company maintains a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.87, suggesting a relatively balanced financial structure.
Key Takeaways
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that Apple is efficiently utilizing its resources and generating strong profits, despite slower revenue growth. Overall, Apple's financial performance is solid, with room for potential growth in the future.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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