Looking Into PetIQ's Return On Invested Capital

Benzinga Pro data, PetIQ PETQ reported Q4 sales of $196.64 million. Earnings fell to a loss of $14.47 million, resulting in a 73.81% decrease from last quarter. In Q3, PetIQ brought in $210.53 million in sales but lost $8.33 million in earnings.

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, PetIQ 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 Q4, PetIQ 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 PetIQ, a negative ROIC ratio of -0.45% 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

PetIQ reported Q4 earnings per share at $-0.01/share, which did not meet analyst predictions of $0.02/share.

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