Benzinga | Oct 25, 2021 10:54AM EDT

How Bad Are PetMed Express's Earnings? | Return On Invested Capital

Pulled from Benzinga Pro data, PetMed Express (NASDAQ:PETS) showed a loss in earnings since Q4, totaling $5.42 million. Sales, on the other hand, increased by 10.65% to $79.31 million during Q1. In Q4, PetMed Express earned $8.39 million and total sales reached $71.68 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 Q1, PetMed Express posted an ROIC of 3.86%.

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 Q1, PetMed Express posted an ROIC of 3.86%.

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 PetMed Express, the positive return on invested capital ratio of 3.86% 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

PetMed Express reported Q1 earnings per share at $0.25/share, which did not meet analyst predictions of $0.36/share.