According to Benzinga Pro data, during Q4, Stoneridge (NYSE:SRI) posted sales of $203.70 million. Earnings were up 40.49%, but Stoneridge still reported an overall loss of $6.16 million. Stoneridge collected $181.68 million in revenue during Q3, but reported earnings showed a $10.36 million loss.
What Is ROIC?
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company’s ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q4, Stoneridge posted an ROIC of -2.08%.
Keep in mind, while ROIC is a good measure of a company’s recent performance, it is not a highly reliable predictor of a company’s earnings or sales in the near future.
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company’s ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q4, Stoneridge posted an ROIC of -2.08%.
Keep in mind, while ROIC is a good measure of a company’s recent performance, it is not a highly reliable predictor of a company’s earnings or sales in the near future.
For Stoneridge, a negative ROIC ratio of -2.08% suggests that management may not be effectively allocating their capital. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns; poor capital allocation can be a leech on the performance of a company over time.
Analyst Predictions
Stoneridge reported Q4 earnings per share at $-0.24/share, which did not meet analyst predictions of $-0.24/share.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
