Looking Into Agenus's Return On Capital Employed
Agenus (NASDAQ: AGEN) reported Q2 sales of $26.95 million. Earnings fell to a loss of $26.43 million, resulting in a 17.0% decrease from last quarter. Agenus collected $15.13 million in revenue during Q1, but reported earnings showed a $31.85 million loss.
What Is ROCE?
Changes in earnings and sales indicate shifts in Agenus’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q2, Agenus posted an ROCE of 0.13%.
It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.
ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Agenus is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will lead to higher returns and earnings per share growth.
For Agenus, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, an important note investors will take into account when gauging the payoff from long-term financing strategies.
Q2 Earnings Insight
Agenus reported Q2 earnings per share at $-0.28/share, which did not meet analyst predictions of $-0.27/share.
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
