NovaBay Pharmaceuticals, Inc. (AMEX:NBY) has aROIC of -337.36% and a WACC of 5.15%, indicating operational challenges or unprofitable investments.
Guardion Health Sciences, Inc. (NASDAQ:GHSI) shows relatively better efficiency with the highest ROIC/WACC ratio among peers at -4.94.
Companies like OpGen, Inc. (NASDAQ:OPGN) display significant operational inefficiencies with a ROIC/WACC ratio of -103.33, highlighting critical concerns for investors.
NovaBay Pharmaceuticals, Inc. (AMEX:NBY) operates in the competitive eyecare and skincare market, focusing on products like Avenova for eyelid and lash hygiene and the DERMAdoctor skincare line. With a stock price of $0.49, the company’s financial metrics, particularly its Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC), are crucial for investors to understand its financial health and operational efficiency. NBY’s ROIC is at -337.36%, and its WACC stands at 5.15%, resulting in a ROIC/WACC ratio of -65.53. This indicates that NovaBay is currently generating returns on invested capital that are significantly lower than the cost of that capital, highlighting operational challenges or investments that have not yet begun to yield positive returns.
Comparatively, its peers in the health sciences sector, including Guardion Health Sciences, Inc. (NASDAQ:GHSI), OpGen, Inc. (NASDAQ:OPGN), Oragenics, Inc. (AMEX:OGEN), and electroCore, Inc. (NASDAQ:ECOR), show varying degrees of financial health through their own ROIC and WACC metrics. For instance, GHSI, with a ROIC of -35.56% and a WACC of 7.19%, has the highest ROIC/WACC ratio among the group at -4.94. This suggests that, despite also having a negative ratio, GHSI is relatively more efficient in generating returns on invested capital compared to the cost of its capital.
On the other end of the spectrum, OpGen, Inc. (OPGN) presents a ROIC of -1341.30% with a WACC of 12.98%, leading to a ROIC/WACC ratio of -103.33. This extreme negative ratio indicates significant operational inefficiencies or unprofitable investments, making it a critical point of concern for investors. Similarly, Oragenics, Inc. (OGEN) and electroCore, Inc. (ECOR) also display negative ROIC/WACC ratios of -123.81 and -14.53, respectively, further illustrating the financial challenges faced by companies in this sector.
The analysis of these companies, particularly the comparison of their ROIC to WACC ratios, provides valuable insights into their operational efficiency and financial health. While all companies analyzed have negative ratios, indicating that they are currently not generating returns above their capital costs, the degree to which they are negative varies significantly. Guardion Health Sciences, Inc. (GHSI) emerges as the most efficient among its peers, despite the overall negative trend, suggesting it may be better positioned to improve its financial health in the future.