In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Apple (NASDAQ:AAPL) alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer 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 | 37.01 | 59.72 | 8.87 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 14.94 | 1.24 | 0.96 | 2.34% | $1.23 | $2.44 | 10.11% |
| NetApp Inc | 22.94 | 25.84 | 3.90 | 23.9% | $0.38 | $1.1 | 7.61% |
| Western Digital Corp | 69.01 | 1.86 | 1.46 | 4.28% | $0.86 | $1.55 | 48.91% |
| Pure Storage Inc | 111.56 | 10.87 | 5.60 | 2.52% | $0.08 | $0.54 | 10.91% |
| Super Micro Computer Inc | 9.25 | 1.99 | 0.75 | 6.68% | $0.4 | $0.6 | 37.87% |
| Eastman Kodak Co | 6.43 | 0.37 | 0.39 | 2.09% | $0.05 | $0.06 | -9.49% |
| Turtle Beach Corp | 47.94 | 2.93 | 0.88 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 4.72 | 1.19 | 1.68 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 16.79 | 1.16 | 0.71 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 33.73 | 5.27 | 1.81 | 6.46% | $0.34 | $0.71 | 167.04% |
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; }
Through an analysis of Apple, we can infer the following trends:
The Price to Earnings ratio of 37.01 for this company is 1.1x above the industry average, indicating a premium valuation associated with the stock.
With a Price to Book ratio of 59.72, which is 11.33x 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.
With a relatively high Price to Sales ratio of 8.87, which is 4.9x 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 17.37% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion is 95.59x above the industry average, highlighting stronger profitability and robust cash flow generation.
With higher gross profit of $43.88 Billion, which indicates 61.8x 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 167.04%. 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:
As Apple is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 1.87 compared to the other companies.
This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.
Key Takeaways
For Apple, the PE, PB, and PS ratios are all high compared to its peers in the Technology Hardware, Storage & Peripherals industry, indicating that the stock may be overvalued. On the other hand, Apple's high ROE, EBITDA, and gross profit suggest strong profitability and operational efficiency relative to its industry peers. However, the low revenue growth rate may raise concerns about the company's ability to sustain its financial performance in the long term.
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.
