CarParts.com's Return on Invested Capital Insights

Benzinga Pro data, CarParts.com PRTS reported Q4 sales of $138.26 million. Earnings fell to a loss of $5.03 million, resulting in a 7.96% decrease from last quarter. CarParts.com collected $141.85 million in revenue during Q3, but reported earnings showed a $4.66 million loss.

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 Q4, CarParts.com posted an ROIC of -4.59%.

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, CarParts.com posted an ROIC of -4.59%.

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 CarParts.com, a negative ROIC ratio of -4.59% 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

CarParts.com reported Q4 earnings per share at $-0.1/share, which beat analyst predictions of $-0.11/share.

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