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In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
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 | 38.55 | 57.27 | 9.39 | 35.34% | $31.03 | $43.72 | 9.63% |
| Western Digital Corp | 26.90 | 7.73 | 4.51 | 5.21% | $0.51 | $1.07 | 29.99% |
| Hewlett Packard Enterprise Co | 30.88 | 1.42 | 1.06 | 1.14% | $1.11 | $2.67 | 18.5% |
| Super Micro Computer Inc | 34.51 | 5.47 | 1.66 | 3.08% | $0.26 | $0.54 | 7.51% |
| Pure Storage Inc | 228.34 | 23.33 | 9.52 | 3.68% | $0.09 | $0.6 | 12.73% |
| NetApp Inc | 21.29 | 24.63 | 3.77 | 23.13% | $0.38 | $1.1 | 1.17% |
| Logitech International SA | 26.08 | 7.36 | 3.58 | 6.77% | $0.18 | $0.48 | 5.47% |
| Turtle Beach Corp | 15.63 | 2.60 | 0.90 | -2.47% | $0.0 | $0.02 | -25.76% |
| Average | 54.8 | 10.36 | 3.57 | 5.79% | $0.36 | $0.93 | 7.09% |
By conducting an in-depth analysis of Apple, we can identify the following trends:
A Price to Earnings ratio of 38.55 significantly below the industry average by 0.7x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 57.27, which is 5.53x 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 9.39, which is 2.63x the industry average, the stock might be considered overvalued based on sales performance.
The company has a higher Return on Equity (ROE) of 35.34%, which is 29.55% 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 $31.03 Billion is 86.19x above the industry average, highlighting stronger profitability and robust cash flow generation.
With higher gross profit of $43.72 Billion, which indicates 47.01x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
The company's revenue growth of 9.63% is notably higher compared to the industry average of 7.09%, showcasing exceptional sales performance and strong demand for its products or services.
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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.
By evaluating Apple against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations 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 1.54 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.
For Apple in the Technology Hardware, Storage & Peripherals industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Apple demonstrates strong performance compared to its industry peers, reflecting robust financial health and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: AAPL
