Pegasystems's Return on Invested Capital Overview

Pegasystems's Return on Invested Capital Overview

Benzinga Pro data, Pegasystems PEGA reported Q2 sales of $274.34 million. Earnings fell to a loss of $286.30 million, resulting in a 75439.84% decrease from last quarter. In Q1, Pegasystems brought in $376.31 million in sales but lost $379 thousand in earnings.

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 Q2, Pegasystems posted an ROIC of 1.87%.

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 Q2, Pegasystems posted an ROIC of 1.87%.

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 Pegasystems, the positive return on invested capital ratio of 1.87% 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

Pegasystems reported Q2 earnings per share at $-0.38/share, which did not meet analyst predictions of $0.11/share.

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

Posted In: BZI-ROCEEarnings