Rackspace Technology's Return on Invested Capital Overview

According to Benzinga Pro data, during Q1, Rackspace Technology RXT posted sales of $775.50 million. Earnings were up 53.56%, but Rackspace Technology still reported an overall loss of $38.50 million. In Q4, Rackspace Technology brought in $777.30 million in sales but lost $82.90 million in earnings.

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, Rackspace Technology posted an ROIC of 0.45%.

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, Rackspace Technology posted an ROIC of 0.45%.

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 Rackspace Technology, the positive return on invested capital ratio of 0.45% 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

Rackspace Technology reported Q1 earnings per share at $0.22/share, which beat analyst predictions of $0.21/share.

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