Taken from Benzinga Pro data, Service Today NOW showed a loss in revenues since Q1, totaling $20.00 million. Sales, on the other hand, rose 1.74% to $1.75 billion in Q2. ServiceNow reached revenues of $75.00 million and sales of $1.72 billion in Q1.
Why is ROIC Important?
Return on Invested Capital is a measure of annual pre-tax income relative to a business’s invested capital. Changes in revenues and sales indicate changes in a company’s ROIC. A higher ROIC usually represents a company’s successful growth and is a sign of higher earnings per share in the future. A low or negative ROIC indicates the opposite. In Q2, ServiceNow posted an ROIC of 1.56%.
Remember, while ROIC is a good measure of a company’s recent performance, it is not a very reliable predictor of a company’s earnings or sales in the near future.
Return on Invested Capital is a measure of annual pre-tax income relative to a business’s invested capital. Changes in revenues and sales indicate changes in a company’s ROIC. A higher ROIC usually represents a company’s successful growth and is a sign of higher earnings per share in the future. A low or negative ROIC indicates the opposite. In Q2, ServiceNow posted an ROIC of 1.56%.
Remember, while ROIC is a good measure of a company’s recent performance, it is not a very reliable predictor of a company’s earnings or sales in the near future.
For ServiceNow, the positive return on invested capital ratio of 1.56% suggests that management is effectively allocating their capital. Effective capital allocation is a positive indicator that a company will achieve stronger success and favorable long-term profitability.
Analyst Forecasts
ServiceNow reported Q2 earnings per share at $1.62/share, beating analyst forecasts of $1.54/share.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.