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Apollo Endosurgery's Return On Capital Employed Insights

By Benzinga Insights

According to data from Benzinga Pro, during Q1, Apollo Endosurgery's (NASDAQ:APEN) reported sales totaled $16.66 million. Despite a 19.14% increase in earnings, the company posted a loss of $8.41 million. In Q4, Apollo Endosurgery brought in $16.17 million in sales but lost $10.40 million in earnings.

Why Is ROCE Significant?

Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed by a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE 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 ROCE suggests the opposite. In Q1, Apollo Endosurgery posted an ROCE of -0.15%.

Keep in mind, while ROCE 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.

ROCE is a powerful metric for comparing the effectiveness of capital allocation for similar companies. A relatively high ROCE shows Apollo Endosurgery is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and, ultimately, earnings per share (EPS) growth.

For Apollo Endosurgery, a negative ROCE ratio of -0.15% 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

Apollo Endosurgery reported Q1 earnings per share at $-0.21/share, which did not meet analyst predictions of $-0.2/share.

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

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Dive Deeper:
Workiva's Return On Capital Employed Insights
Benzinga Pro data, Workiva (NYSE:WK) reported Q1 sales of $129.67 million. Earnings fell to a loss of $18.49 million, resulting…
CytoSorbents's Return On Capital Employed Insights
According to data from Benzinga Pro, during Q1, CytoSorbents's (NASDAQ:CTSO) reported sales totaled $8.69 million. Despite a 3.66% increase in…
Esperion Therapeutics's Return On Capital Employed Insights
According to Benzinga Pro data, during Q1, Esperion Therapeutics (NASDAQ:ESPR) posted sales of $18.84 million. Earnings were up 12.88%, but…
MPLX's Return On Capital Employed Insights
Pulled from Benzinga Pro data, MPLX (NYSE:MPLX) posted Q1 earnings of $833.00 million, an increase from Q4 of 0.6%. Sales…
One subscription that gives you access to news from hundreds of sites
Franklin Resources's Return On Capital Employed Insights
Pulled from Benzinga Pro data, Franklin Resources (NYSE:BEN) posted Q2 earnings of $359.10 million, an increase from Q1 of 34.09%.…
Kymera Therapeutics's Return On Capital Employed Insights
Benzinga Pro data, Kymera Therapeutics (NASDAQ:KYMR) reported Q1 sales of $9.62 million. Earnings fell to a loss of $36.68 million,…
Get all your news in one place