If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So on that note, Sterling Check (NASDAQ:STER) looks quite promising in regards to its trends of return on capital.
What Is Return On Capital Employed (ROCE)?
For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Sterling Check, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.013 = US$17m ÷ (US$1.4b - US$130m) (Based on the trailing twelve months to June 2022).
So, Sterling Check has an ROCE of 1.3%. Ultimately, that's a low return and it under-performs the Professional Services industry average of 13%.
See our latest analysis for Sterling Check
NasdaqGS:STER Return on Capital Employed September 23rd 2022
Above you can see how the current ROCE for Sterling Check compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free report for Sterling Check.
What Can We Tell From Sterling Check's ROCE Trend?
Sterling Check has broken into the black (profitability) and we're sure it's a sight for sore eyes. The company now earns 1.3% on its capital, because two years ago it was incurring losses. Interestingly, the capital employed by the business has remained relatively flat, so these higher returns are either from prior investments paying off or increased efficiencies. That being said, while an increase in efficiency is no doubt appealing, it'd be helpful to know if the company does have any investment plans going forward. Because in the end, a business can only get so efficient.
The Bottom Line On Sterling Check's ROCE
As discussed above, Sterling Check appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. Astute investors may have an opportunity here because the stock has declined 25% in the last year. So researching this company further and determining whether or not these trends will continue seems justified.
While Sterling Check looks impressive, no company is worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether STER is currently trading for a fair price.
While Sterling Check may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
如果我們想要找到一隻可以長期成倍增長的股票,我們應該尋找什麼潛在趨勢?首先,我們想要確定一個不斷增長的退貨在已使用資本(ROCE)上,然後在此基礎上,不斷增加基地已動用資本的比例。基本上,這意味着一家公司有盈利的舉措,可以繼續進行再投資,這是複合機器的一個特點。所以在這個音符上,英鎊支票(納斯達克:STER)在資本回報率趨勢方面看起來相當有希望。
什麼是資本回報率(ROCE)?
對於那些不知道的人來説,ROCE是一家公司的年度税前利潤(其回報)相對於業務資本的衡量標準。要計算Sterling Check的此指標,公式如下:
已動用資本回報率=息税前收益(EBIT)?(總資產-流動負債)
0.013美元=1700萬美元(14億美元-1.3億美元)(根據截至2022年6月的往績12個月計算).
所以,英鎊支票的淨資產收益率為1.3%。歸根結底,這是一個低迴報,而且低於專業服務行業13%的平均水平。
查看我們對Sterling Check的最新分析
NasdaqGS:2022年9月23日的資本回報率
上面你可以看到目前英鎊支票的淨資產收益率與之前的資本回報率相比如何,但你只能從過去知道這麼多。如果您想查看分析師對未來的預測,您應該查看我們的免費為英鎊支票報到。
我們能從Sterling Check的ROCE趨勢中看出什麼?
英鎊支票已經扭虧為盈,我們相信這是一個令人眼疼的景象。該公司現在的資本回報率為1.3%,因為兩年前它還在虧損。有趣的是,企業使用的資本一直相對持平,因此這些較高的回報要麼來自先前的投資回報,要麼來自效率的提高。話雖如此,雖然提高效率無疑是有吸引力的,但瞭解該公司是否有任何未來的投資計劃將是有幫助的。因為歸根結底,一家企業只能變得如此高效。
Sterling Check ROCE的底線
如上所述,Sterling Check似乎越來越擅長產生回報,因為已動用資本持平,但收益(息税前)上升。精明的投資者可能在這裏有機會,因為該股在過去一年裏下跌了25%。因此,進一步研究這家公司,並確定這些趨勢是否會繼續下去似乎是合理的。
雖然英鎊支票看起來令人印象深刻,但沒有一家公司值無限的價格。我們的內部價值信息圖免費研究報告有助於直觀地瞭解ster目前的交易價格是否合理。
雖然Sterling Check目前可能沒有獲得最高的回報,但我們已經編制了一份目前股本回報率超過25%的公司名單。看看這個免費在這裏列出。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。