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Benzinga

Looking Into Pros Holdings's Return On Invested Capital

Pros Holdings (NYSE:PRO) brought in sales totaling $66.49 million during Q1 according to data provided by Benzinga Pro. However, earnings decreased 21.31%, resulting in a loss of $28.64 million. Pros Holdings collected $64.97 million in revenue during Q4, but reported earnings showed a $23.61 million loss.

Why Is ROIC Significant?

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, Pros Holdings posted an ROIC of -9.05%.

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, Pros Holdings posted an ROIC of -9.05%.

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 Pros Holdings, a negative ROIC ratio of -9.05% 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

Pros Holdings reported Q1 earnings per share at $-0.21/share, which beat analyst predictions of $-0.24/share.

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