Luna Innovations's Return on Invested Capital Overview

According to Benzinga Pro, during Q1, Luna Innovations LUNA earned $9.58 million, a 508.32% increase from the preceding quarter. Luna Innovations's sales decreased to $22.48 million, a 7.19% change since Q4. In Q4, Luna Innovations earned $1.57 million, whereas sales reached $24.22 million.

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 Q1, Luna Innovations posted an ROIC of -2.07%.

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, Luna Innovations posted an ROIC of -2.07%.

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 Luna Innovations, a negative ROIC ratio of -2.07% 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

Luna Innovations reported Q1 earnings per share at $0.05/share, which beat analyst predictions of $0.01/share.

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