Understanding Apple's Position In Technology Hardware, Storage & Peripherals Industry Compared To Competitors
Apple Inc. AAPL | 259.02 | +0.32% |
Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Apple (NASDAQ:AAPL) in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 38.66 | 62.39 | 9.26 | 23.83% | $32.5 | $43.88 | 6.07% |
| Hewlett Packard Enterprise Co | 15.70 | 1.30 | 1.01 | 2.34% | $1.23 | $2.44 | 10.11% |
| NetApp Inc | 23.87 | 29.54 | 4.23 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 80.24 | 2.17 | 1.70 | 4.28% | $0.86 | $1.55 | 48.91% |
| Super Micro Computer Inc | 17.14 | 3.69 | 1.39 | 6.68% | $0.4 | $0.6 | 37.87% |
| Pure Storage Inc | 126.40 | 12.31 | 6.34 | 2.52% | $0.08 | $0.54 | 10.91% |
| Eastman Kodak Co | 9.46 | 0.54 | 0.58 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 53.87 | 3.29 | 0.99 | 3.3% | $0.01 | $0.03 | 59.51% |
| Immersion Corp | 4.97 | 1.25 | 1.77 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 18.08 | 1.25 | 0.77 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 38.86 | 6.15 | 2.09 | 7.37% | $0.34 | $0.72 | 167.6% |
By thoroughly analyzing Apple, we can discern the following trends:
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With a Price to Earnings ratio of 38.66, which is 0.99x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 62.39 which exceeds the industry average by 10.14x.
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The stock's relatively high Price to Sales ratio of 9.26, surpassing the industry average by 4.43x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 23.83% is 16.46% above the industry average, highlighting efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.5 Billion, which is 95.59x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $43.88 Billion is 60.94x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 6.07% is significantly lower compared to the industry average of 167.6%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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:
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When evaluating the debt-to-equity ratio, Apple is in the middle position among its top 4 peers.
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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 ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Apple's assets and sales highly. Apple's high ROE, EBITDA, and gross profit reflect strong profitability, while the low revenue growth may indicate a need for expansion strategies to align with industry trends.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
