According to Benzinga Pro, during Q1, Service Today NOW earned $ 75.00 million, an 188.46% increase from the previous quarter. ServiceNow also posted a total of $ 1.72 billion in sales, a 6.69% increase since Q4. In Q4, ServiceNow earned $ 26.00 million, and total sales reached $ 1.61 billion.
What is Return on Capital Employed?
Earnings data without context is unclear and can be difficult to base trading decisions on. Return on Capital Employed (ROCE) helps filter the signal from noise by measuring annual pre-tax revenue associated with the capital used by a business. In general, higher ROCE suggests successful growth of a company and is a sign of higher profits per share in the future. In Q1, ServiceNow posted an ROCE of 0.02%.
It is important to note that ROCE evaluates past performance and is not used as a predictive tool. It’s a good measure of a company’s recent performance, but it doesn’t take into account factors that could affect revenues and sales in the near future.
ROCE is a powerful metric for comparing the effectiveness of capital allocation for similar companies. A relatively high ROCE shows ServiceNow is potentially working at a higher level of efficiency than other companies in its industry. If the company gets high profits at its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher profits and, ultimately, growth in earnings per share. (EPS).
For ServiceNow, a positive return on capital employed ratio of 0.02% suggests that management is effectively allocating their capital. Effective capital allocation is a positive indicator that a company will achieve more substantial success and favorable long -term profits.
Analyst Predictions
ServiceNow reported Q1 earnings per share at $ 1.73/share, which is more than analyst forecasts of $ 1.7/share.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.