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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 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 | 41.18 | 61.18 | 10.03 | 35.34% | $31.03 | $43.72 | 9.63% |
| Western Digital Corp | 31.04 | 8.92 | 5.21 | 5.21% | $0.51 | $1.07 | 29.99% |
| Hewlett Packard Enterprise Co | 28.72 | 1.32 | 0.98 | 1.14% | $1.11 | $2.67 | 18.5% |
| Pure Storage Inc | 236.61 | 24.17 | 9.86 | 3.68% | $0.09 | $0.6 | 12.73% |
| Super Micro Computer Inc | 29.98 | 4.75 | 1.44 | 3.08% | $0.26 | $0.54 | 7.51% |
| NetApp Inc | 20.45 | 23.66 | 3.63 | 23.13% | $0.38 | $1.1 | 1.17% |
| Logitech International SA | 27.45 | 8.52 | 3.87 | 7.99% | $0.22 | $0.51 | 6.27% |
| Turtle Beach Corp | 16.81 | 2.79 | 0.97 | -2.47% | $0.0 | $0.02 | -25.76% |
| Average | 55.87 | 10.59 | 3.71 | 5.97% | $0.37 | $0.93 | 7.2% |
Upon analyzing Apple, the following trends can be observed:
At 41.18, the stock's Price to Earnings ratio is 0.74x 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 61.18 which exceeds the industry average by 5.78x.
The Price to Sales ratio of 10.03, which is 2.7x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The company has a higher Return on Equity (ROE) of 35.34%, which is 29.37% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.03 Billion, which is 83.86x above the industry average, implying stronger profitability and robust cash flow generation.
The company has higher gross profit of $43.72 Billion, which indicates 47.01x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company is experiencing remarkable revenue growth, with a rate of 9.63%, outperforming the industry average of 7.2%.
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 considering the Debt-to-Equity ratio, Apple can be compared to its top 4 peers, leading to the following observations:
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, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, EBITDA, gross profit, and revenue growth suggest that Apple is performing exceptionally well within its industry sector. Overall, Apple's strong financial performance and growth potential make it a compelling investment opportunity in the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: AAPL
