In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market standing, and growth prospects, our objective 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 | 34.44 | 48.83 | 8.39 | 58.74% | $45.91 | $58.27 | 3.95% |
| Super Micro Computer Inc | 18.47 | 4.04 | 1.29 | 5.29% | $0.4 | $0.67 | 54.93% |
| Hewlett Packard Enterprise Co | 7.25 | 0.79 | 0.66 | 2.39% | $1.11 | $2.29 | 16.27% |
| NetApp Inc | 16.94 | 18.70 | 2.96 | 31.69% | $0.45 | $1.15 | 2.18% |
| Pure Storage Inc | 155.55 | 12.04 | 5.22 | 3.12% | $0.11 | $0.58 | 5.87% |
| Western Digital Corp | 12.42 | 1.23 | 0.94 | 4.89% | $0.96 | $1.52 | 41.33% |
| Eastman Kodak Co | 9.54 | 0.55 | 0.58 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 46.48 | 2.84 | 0.86 | 3.3% | $0.01 | $0.03 | 59.51% |
| AstroNova Inc | 21.10 | 0.88 | 0.53 | 0.26% | $0.0 | $0.01 | 7.65% |
| Average | 35.97 | 5.13 | 1.63 | 6.54% | $0.39 | $0.79 | 23.1% |
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Upon analyzing Apple, the following trends can be observed:
At 34.44, the stock's Price to Earnings ratio is 0.96x less than the industry average, suggesting favorable growth potential.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 48.83 which exceeds the industry average by 9.52x.
With a relatively high Price to Sales ratio of 8.39, which is 5.15x the industry average, the stock might be considered overvalued based on sales performance.
With a Return on Equity (ROE) of 58.74% that is 52.2% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.91 Billion, which is 117.72x above the industry average, implying stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $58.27 Billion, which indicates 73.76x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 3.95%, which is much lower than the industry average of 23.1%, the company is experiencing a notable slowdown in sales expansion.
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.
In light of the Debt-to-Equity ratio, a comparison between Apple and its top 4 peers reveals the following information:
Compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.45, indicating a balanced financial structure.
This suggests that the company maintains a reasonable level of debt while also leveraging equity financing.
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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