DaVita's Return on Invested Capital Overview

Pulled from Benzinga Pro data, DaVita DVA posted Q1 earnings of $205.72 million, an increase from Q4 of 17.53%. Sales dropped to $2.82 billion, a 4.28% decrease between quarters. DaVita earned $249.43 million, and sales totaled $2.94 billion in Q4.

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 Q1, DaVita posted an ROIC of 3.41%.

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 Q1, DaVita posted an ROIC of 3.41%.

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 DaVita, the positive return on invested capital ratio of 3.41% 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

DaVita reported Q1 earnings per share at $1.61/share, which did not meet analyst predictions of $1.87/share.

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