Novanta's Return on Invested Capital Overview

According to Benzinga Pro, during Q4, Novanta NOVT earned $13.75 million, a 1.11% increase from the preceding quarter. Novanta also posted a total of $198.96 million in sales, a 11.95% increase since Q3. Novanta earned $13.60 million, and sales totaled $177.73 million in Q3.

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, Novanta posted an ROIC of 2.47%.

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, Novanta posted an ROIC of 2.47%.

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 Novanta, the positive return on invested capital ratio of 2.47% 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.

Upcoming Earnings Estimate

Novanta reported Q4 earnings per share at $0.67/share, which beat analyst predictions of $0.64/share.

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