Analyzing Apple In Comparison To Competitors In Technology Hardware, Storage & Peripherals Industry

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 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 30.19 40.11 7.95 31.88% $30.74 $42.27 -4.31%
Super Micro Computer Inc 42.90 8.86 3.80 9.85% $0.4 $0.6 200.01%
NetApp Inc 25.69 21.42 4.04 27.2% $0.43 $1.18 3.86%
Hewlett Packard Enterprise Co 12.38 1.09 0.84 1.82% $1.23 $2.46 -13.5%
Pure Storage Inc 199.33 14.15 6.86 -2.65% $0.01 $0.5 -12.2%
Eastman Kodak Co 8.03 0.45 0.45 2.66% $0.06 $0.05 -10.43%
AstroNova Inc 28.49 1.54 0.91 3.06% $0.01 $0.01 -0.65%
Transact Technologies Inc 66.67 1.04 0.66 -2.66% $-0.0 $0.01 -52.01%
Average 54.78 6.94 2.51 5.61% $0.31 $0.69 16.44%

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After a detailed analysis of Apple, the following trends become apparent:

The Price to Earnings ratio of 30.19 is 0.55x lower than the industry average, indicating potential undervaluation for the stock.

The elevated Price to Book ratio of 40.11 relative to the industry average by 5.78x suggests company might be overvalued based on its book value.

The stock's relatively high Price to Sales ratio of 7.95, surpassing the industry average by 3.17x, may indicate an aspect of overvaluation in terms of sales performance.

With a Return on Equity (ROE) of 31.88% that is 26.27% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $30.74 Billion, which is 99.16x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

With higher gross profit of $42.27 Billion, which indicates 61.26x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

The company is witnessing a substantial decline in revenue growth, with a rate of -4.31% compared to the industry average of 16.44%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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:

Among its top 4 peers, Apple is placed in the middle with a moderate debt-to-equity ratio of 1.41.

This implies a balanced financial structure, with a reasonable proportion of debt and equity.

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 a premium valuation relative to industry competitors. In terms of ROE, EBITDA, and gross profit, Apple demonstrates strong performance compared to peers, while revenue growth lags behind. Overall, Apple's valuation metrics reflect a mix of undervaluation and premium valuation, with strong profitability but slower revenue growth.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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