In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) against its key competitors in the Technology Hardware, Storage & Peripherals industry. By analyzing important financial metrics, market position, and growth prospects, we aim 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 | 40.75 | 65.76 | 9.76 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 11.36 | 1.15 | 0.97 | 5.72% | $1.23 | $2.44 | 9.7% |
| NetApp Inc | 22.32 | 27.63 | 3.96 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 75.63 | 2.04 | 1.60 | 4.28% | $0.86 | $1.55 | 48.91% |
| Super Micro Computer Inc | 20.18 | 4.34 | 1.63 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 154.59 | 14.01 | 6.98 | 4.44% | $0.08 | $0.54 | 8.81% |
| Eastman Kodak Co | 9.51 | 0.55 | 0.58 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 58.84 | 3.60 | 1.08 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 5.06 | 1.27 | 1.80 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 19.57 | 1.35 | 0.83 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 41.9 | 6.22 | 2.16 | 7.96% | $0.34 | $0.72 | 167.32% |
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When conducting a detailed analysis of Apple, the following trends become clear:
The stock's Price to Earnings ratio of 40.75 is lower than the industry average by 0.97x, suggesting potential value in the eyes of market participants.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 65.76 which exceeds the industry average by 10.57x.
The Price to Sales ratio of 9.76, which is 4.52x 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 15.87% above the industry average, highlighting efficient use of equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 95.59x above the industry average, implying stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $43.88 Billion, which indicates 60.94x above the industry average, indicating 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 167.32%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 terms of the Debt-to-Equity ratio, Apple stands in comparison with its top 4 peers, leading to the following comparisons:
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, but may be facing challenges in revenue expansion.
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.
