Benzinga Pro data, LendingTree TREE reported first-quarter sales of $283.18 million. Profit fell to a loss of $10.83 million, resulting in a decline of 122.59% from last quarter. In the fourth quarter, LendingTree earned $47.92 million and total sales reached $258.29 million.
What is ROIC?
Profit data without context is unclear and can be difficult to base trading decisions on. Return on Invested Capital (ROIC) helps filter the signal from the noise by measuring the annual pre-tax profit against the capital invested by a company. Generally, a higher ROIC suggests successful growth of a business and is a sign of higher earnings per share in the future. In the first quarter, LendingTree posted an ROIC of 0.06%.
It is important to keep in mind that the ROIC evaluates past performance and is not used as a predictive tool. It’s a good measure of a company’s recent performance, but it doesn’t take into account factors that may affect profits and sales in the near future.
Return on invested capital is a measure of the annual pre-tax profit relative to the capital invested by a business. Changes in profits and sales indicate changes in a company’s ROIC. A higher return on investment is generally indicative of successful business growth and is a sign of higher earnings per share in the future. A low or negative ROIC suggests otherwise. In the first quarter, LendingTree posted an ROIC of 0.06%.
Keep in mind that while ROI is a good measure of a company’s recent performance, it’s not a very reliable indicator of a company’s profits or sales in the near future.
For LendingTree, the positive ROI of 0.06% suggests that management is allocating its capital efficiently. Efficient capital allocation is a positive indicator that a business will achieve more sustainable success and favorable long-term returns.
LendingTree reported first-quarter earnings per share of $0.46/share, beating analysts’ forecast of $0.08/share.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.