Insights Into Apple's Performance Versus Peers In Technology Hardware, Storage & Peripherals Sector

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.

By closely studying Apple, we can observe the following trends:

• The stock's Price to Earnings ratio of 31.5 is lower than the industry average by 0.79x, suggesting potential value in the eyes of market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 47.09 which exceeds the industry average by 6.48x.

• The stock's relatively high Price to Sales ratio of 7.67, surpassing the industry average by 3.25x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 37.11% that is 32.45% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.25 Billion, which is 129.0x above the industry average, indicating stronger profitability and robust cash flow generation.

• The gross profit of $44.87 Billion is 59.04x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 5.08% is significantly lower compared to the industry average of 9.8%. This indicates a potential fall in the company's sales performance.

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.

By analyzing Apple in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

• 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 1.47 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.

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.