Looking Into Trade Desk's Return On Invested Capital

Pulled from Benzinga Pro data, Trade Desk TTD showed a loss in earnings since Q3, totaling $8.04 million. Sales, on the other hand, increased by 31.39% to $395.60 million during Q4. In Q3, Trade Desk earned $59.38 million and total sales reached $301.09 million.

What Is ROIC?

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, Trade Desk posted an ROIC of 6.17%.

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, Trade Desk posted an ROIC of 6.17%.

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 Trade Desk, the positive return on invested capital ratio of 6.17% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

Trade Desk reported Q4 earnings per share at $0.42/share, which beat analyst predictions of $0.28/share.

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