In today’s rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate 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 |
34.47 |
51.62 |
9.11 |
30.44% |
$28.2 |
$39.68 |
4.87% |
| Super Micro Computer Inc |
23.19 |
4.99 |
1.88 |
6.68% |
$0.36 |
$0.6 |
37.87% |
| NetApp Inc |
24.05 |
27.10 |
4.09 |
23.9% |
$0.38 |
$1.1 |
7.61% |
| Hewlett Packard Enterprise Co |
13.35 |
1.11 |
0.86 |
2.34% |
$1.23 |
$2.44 |
10.11% |
| Pure Storage Inc |
116.19 |
11.32 |
5.83 |
2.52% |
$0.08 |
$0.54 |
10.91% |
| Eastman Kodak Co |
8.84 |
0.41 |
0.42 |
2.09% |
$0.05 |
$0.06 |
-9.49% |
| Immersion Corp |
4.82 |
1.21 |
1.72 |
13.41% |
$0.03 |
$0.06 |
1323.8% |
| AstroNova Inc |
16.39 |
1.13 |
0.70 |
-0.34% |
$0.0 |
$0.01 |
14.12% |
| Average |
29.55 |
6.75 |
2.21 |
7.23% |
$0.3 |
$0.69 |
199.28% |
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Through a meticulous analysis of Apple, we can observe the following trends:
-
At 34.47, the stock’s Price to Earnings ratio significantly exceeds the industry average by 1.17x, suggesting a premium valuation relative to industry peers.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 51.62 which exceeds the industry average by 7.65x.
-
With a relatively high Price to Sales ratio of 9.11, which is 4.12x the industry average, the stock might be considered overvalued based on sales performance.
-
The Return on Equity (ROE) of 30.44% is 23.21% above the industry average, highlighting efficient use of equity to generate profits.
-
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $28.2 Billion is 94.0x above the industry average, highlighting stronger profitability and robust cash flow generation.
-
With higher gross profit of $39.68 Billion, which indicates 57.51x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
-
The company’s revenue growth of 4.87% is significantly lower compared to the industry average of 199.28%. This indicates a potential fall in the company’s sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative 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.
When assessing Apple against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
-
When compared to its top 4 peers, Apple has a moderate debt-to-equity ratio of 1.52.
-
This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.
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 based on these metrics. On the other hand, Apple’s high ROE, EBITDA, gross profit, and low revenue growth suggest that the company is efficiently utilizing its resources and generating strong profits, despite slower revenue growth compared to industry peers.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
