Looking Into Hostess Brands's Return On Invested Capital

According to Benzinga Pro, during Q2, Hostess Brands TWNK earned $53.13 million, a 12.93% increase from the preceding quarter. Hostess Brands also posted a total of $291.49 million in sales, a 9.82% increase since Q1. Hostess Brands earned $47.05 million, and sales totaled $265.42 million in Q1.

What Is Return On Invested Capital?

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 Q2, Hostess Brands posted an ROIC of 1.89%.

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 Q2, Hostess Brands posted an ROIC of 1.89%.

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 Hostess Brands, the positive return on invested capital ratio of 1.89% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

Hostess Brands reported Q2 earnings per share at $0.23/share, which beat analyst predictions of $0.21/share.