Apple's New AI Venture in China with Alibaba
Feb 14, 2025
Analyzing Apple in Comparison to Competitors in the Technology Hardware, Storage & Peripherals Industry
In today’s fast-paced and competitive business environment, it is essential for investors and industry watchers to conduct thorough evaluations of companies. This article offers a detailed industry comparison, focusing on Apple AAPL and its main rivals in the Technology Hardware, Storage & Peripherals sector. By examining key financial metrics, market standing, and future growth potential, we aim to present useful insights for investors and clarify Apple's performance within this industry.
Overview of Apple
Apple stands as one of the largest corporations globally, with an extensive portfolio that includes both hardware and software products aimed at consumers and businesses alike. The iPhone is a primary contributor to the company’s revenue, while other devices like the Mac, iPad, and Apple Watch create a broad ecosystem revolving around the iPhone. Additionally, Apple continues to expand its offerings with new services, such as streaming video, subscription packages, and augmented reality features. The company develops its own software and semiconductor technology but collaborates with manufacturers like Foxconn and TSMC for production. Approximately half of Apple's sales are made through its own retail outlets, while the remainder comes from partnerships and distribution networks.
Financial Metrics Comparison
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Apple Inc | 36.19 | 51.31 | 8.82 | 58.74% | $45.91 | $58.27 | 3.95% |
| Hewlett Packard Enterprise Co | 10.60 | 1.08 | 0.91 | 5.72% | $1.44 | $2.61 | 15.06% |
| NetApp Inc | 22.05 | 27.29 | 3.91 | 32.84% | $0.44 | $1.18 | 6.15% |
| Western Digital Corp | 18.62 | 1.85 | 1.41 | 4.89% | $0.96 | $1.52 | 41.33% |
| Pure Storage Inc | 171.23 | 15.44 | 7.73 | 4.44% | $0.11 | $0.58 | 8.94% |
| Super Micro Computer Inc | 13.36 | 2.87 | 1.08 | 6.68% | $0.4 | $0.6 | 37.87% |
| Eastman Kodak Co | 10.44 | 0.60 | 0.64 | 1.34% | $0.04 | $0.04 | -2.97% |
| Turtle Beach Corp | 54.26 | 3.32 | 1 | 3.3% | $0.01 | $0.03 | 59.51% |
| AstroNova Inc | 21.90 | 0.91 | 0.55 | 0.26% | $0.0 | $0.01 | 7.65% |
| 40.31 | 6.67 | 2.15 | 7.43% | $0.42 | $0.82 | 21.69% |
From this analysis of Apple, several key observations emerge:
With a P/E ratio of 36.19, Apple is approximately 0.9x lower than the industry average, indicating strong growth prospects.
Its Price to Book ratio stands at 51.31, which is 7.69x higher than the industry average, suggesting that the stock may be overvalued based on its book value.
Apple’s Price to Sales ratio of 8.82 is 4.1x the industry average, indicating potential overvaluation compared to its sales.
Its high Return on Equity of 58.74% is 51.31% above the industry average, showcasing efficient profit generation through equity.
With EBITDA of $45.91 billion, which is 109.31x the industry average, Apple shows strong profitability and cash flow.
Apple’s gross profit of $58.27 billion is 71.06x the industry average, highlighting its robust earnings from operations.
However, its revenue growth rate of 3.95% significantly lags behind the industry average of 21.69%, indicating a slowdown in sales.
Debt and Financial Health
The debt-to-equity (D/E) ratio is a key metric that reflects the financial risk tied to a company’s capital structure. Comparing D/E ratios across the industry facilitates a clearer understanding of a company’s financial stability and risk exposure.
When comparing Apple’s D/E ratio with its key competitors, it is evident:
Apple is positioned in the middle concerning its debt-to-equity ratio.
It has a moderate debt level relative to its equity, with a D/E ratio of 1.45, illustrating a balanced and reasonable financial structure.
Conclusion
In the Technology Hardware, Storage & Peripherals sector, Apple's P/E ratio demonstrates potential undervaluation in comparison to its peers, while its PB and PS ratios suggest it may be overvalued based on industry standards. In several key areas such as ROE, EBITDA, gross profit, and overall operational efficiency, Apple showcases strong performance versus its competitors. However, the company faces challenges in maintaining its rate of revenue growth.
Apple, Technology, Comparison