Evaluating Apple Against Peers In Technology Hardware, Storage & Peripherals Industry

In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Apple (NASDAQ:AAPL) and its primary competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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	37.37	55.87	10.05	39.36%	$35.55	$48.34	7.94%
Western Digital Corp	23.79	9.81	6.07	20.57%	$1.48	$1.23	27.4%
Hewlett Packard Enterprise Co	27.45	1.26	0.94	1.14%	$1.11	$2.67	18.5%
NetApp Inc	20.43	23.56	3.61	31.11%	$0.47	$1.23	2.83%
Pure Storage Inc	185.34	16.50	6.92	4.03%	$0.09	$0.6	12.02%
Super Micro Computer Inc	27.31	3.17	1.05	2.62%	$0.25	$0.47	-15.49%
Logitech International SA	26.77	8.30	3.77	7.99%	$0.22	$0.51	6.27%
Diebold Nixdorf Inc	48.39	2.12	0.66	3.73%	$0.11	$0.25	1.95%
Turtle Beach Corp	16.36	2.54	0.88	1.51%	$0.01	$0.03	-14.74%
Average	46.98	8.41	2.99	9.09%	$0.47	$0.87	4.84%

By carefully studying Apple, we can deduce the following trends:

• A Price to Earnings ratio of 37.37 significantly below the industry average by 0.8x suggests undervaluation. This can make the stock appealing for those seeking growth.

• With a Price to Book ratio of 55.87, which is 6.64x the industry average, Apple might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• The stock's relatively high Price to Sales ratio of 10.05, surpassing the industry average by 3.36x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 39.36% is 30.27% above the industry average, highlighting efficient use of equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $35.55 Billion, which is 75.64x above the industry average, implying stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $48.34 Billion, which indicates 55.56x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 7.94% is notably higher compared to the industry average of 4.84%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.

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 evaluating Apple alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

• Apple falls in the middle of the list when considering the debt-to-equity ratio.

• This indicates that the company has a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.34, suggesting a balanced financial structure with a reasonable debt-equitymix.

Key Takeaways

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 in terms of profitability and growth within the industry sector.

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