Return on Capital Employed Overview: Rapid7

After pulling data from Benzinga Pro it seems like during Q2, Rapid7 RPD posted sales of $126.42 million. Earnings were up 5.15%, but Rapid7 still reported an overall loss of $21.93 million. In Q1, Rapid7 brought in $117.45 million in sales but lost $23.12 million in earnings.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Rapid7's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, Rapid7 posted an ROCE of 0.23%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In Rapid7's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Analyst Predictions

Rapid7 reported Q2 earnings per share at $0.07/share, which beat analyst predictions of $0.02/share.