How Bad Are HealthEquity's Earnings? | Return On Invested Capital

Benzinga Pro data, HealthEquity HQY reported Q2 sales of $189.10 million. Earnings fell to a loss of $875.00 thousand, resulting in a 120.57% decrease from last quarter. In Q1, HealthEquity earned $4.25 million and total sales reached $184.20 million.

What Is ROIC?

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, HealthEquity posted an ROIC of 0.55%.

It is important to keep in mind that ROIC evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, HealthEquity posted an ROIC of 0.55%.

It is important to keep in mind that ROIC evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but does not account for factors that could affect earnings and sales in the near future.

For HealthEquity, the positive return on invested capital ratio of 0.55% 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

HealthEquity reported Q2 earnings per share at $0.4/share, which beat analyst predictions of $0.36/share.