Benzinga | Nov 9, 2021 12:08PM EST

Blue Apron Holdings's Return on Invested Capital Insights

Benzinga Pro data, Blue Apron Holdings (NYSE:APRN) reported Q3 sales of $109.65 million. Earnings fell to a loss of $19.34 million, resulting in a 57.16% decrease from last quarter. Blue Apron Holdings collected $124.01 million in revenue during Q2, but reported earnings showed a $12.30 million loss.

Why Is ROIC Significant?

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, Blue Apron Holdings posted an ROIC of -14.13%.

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

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, Blue Apron Holdings posted an ROIC of -14.13%.

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

For Blue Apron Holdings, a negative ROIC ratio of -14.13% suggests that management may not be effectively allocating their capital.Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns; poor capital allocation can be a leech on the performance of a company over time.

Analyst Predictions

Blue Apron Holdings reported Q3 earnings per share at $-1.17/share, which did not meet analyst predictions of $-0.58/share.