Benzinga | Sep 22, 2021 12:53PM EDT

The Hackett Group's Return on Invested Capital Insights

According to Benzinga Pro, during Q2, The Hackett Group (NASDAQ:HCKT) earned $14.22 million, a 60.59% increase from the preceding quarter. The Hackett Group also posted a total of $73.20 million in sales, a 15.3% increase since Q1. The Hackett Group earned $8.85 million, and sales totaled $63.49 million in Q1.

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, The Hackett Group posted an ROIC of 9.85%.

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, The Hackett Group posted an ROIC of 9.85%.

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 The Hackett Group, the positive return on invested capital ratio of 9.85% 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

The Hackett Group reported Q2 earnings per share at $0.39/share, which beat analyst predictions of $0.29/share.