Looking Into Corbus Pharmaceuticals's Return On Capital Employed

In Q2, Corbus Pharmaceuticals CRBP posted sales of $286.35 thousand. Earnings were up 27.62%, but Corbus Pharmaceuticals still reported an overall loss of $38.14 million. Corbus Pharmaceuticals collected $1.76 million in revenue during Q1, but reported earnings showed a $29.89 million loss.

What Is ROCE?

Changes in earnings and sales indicate shifts in Corbus Pharmaceuticals’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q2, Corbus Pharmaceuticals posted an ROCE of -0.79%.

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

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Corbus Pharmaceuticals 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 lead to higher returns and earnings per share growth.

For Corbus Pharmaceuticals, the return on capital employed ratio shows the current amount of assets may not actually be helping the company achieve higher returns, a note many investors will take into account when making long-term financial decisions.

Q2 Earnings Insight

Corbus Pharmaceuticals reported Q2 earnings per share at $-0.52/share, which did not meet analyst predictions of $-0.39/share.