Geron Corporation (NASDAQ:GERN) has a negative Return on Invested Capital (ROIC) of -68.21%, indicating challenges in generating sufficient returns on its invested capital.
Comparatively, Stem, Inc. (STEM) and Agenus Inc. (AGEN) show varying degrees of capital efficiency, with Agenus displaying a positive ROIC of 111.42%.
Exelixis, Inc. (EXEL) demonstrates strong capital efficiency with a ROIC of 17.91% and a ROIC to WACC ratio of 2.63, suggesting it as a potentially attractive investment.
Geron Corporation (NASDAQ:GERN) is a clinical-stage biopharmaceutical company focused on developing innovative therapies for cancer. The company invests heavily in research and development, which is typical for firms in this sector. This often results in a negative Return on Invested Capital (ROIC) as they work towards bringing new treatments to market.
Geron’s ROIC is -68.21%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 6.99%. This negative ROIC indicates that Geron is not currently generating sufficient returns on its invested capital. The ROIC to WACC ratio of -9.75 further highlights the challenge Geron faces in covering its cost of capital with its current returns.
In comparison, Stem, Inc. (STEM) also has a negative ROIC of -147.16%, with a WACC of 5.51%. The ROIC to WACC ratio of -26.70 suggests that Stem is facing even greater challenges than Geron in generating returns on its investments. This is a common issue for companies in the early stages of development, where high initial costs are not yet offset by revenue.
On the other hand, Agenus Inc. (AGEN) presents a different scenario with a positive ROIC of 111.42%, surpassing its WACC of 80.53%. The ROIC to WACC ratio of 1.38 indicates that Agenus is generating returns above its cost of capital, which is a positive sign for investors looking for companies with potential profitability.
Exelixis, Inc. (EXEL) stands out with a ROIC of 17.91% and a WACC of 6.81%. The ROIC to WACC ratio of 2.63 shows strong capital efficiency, making Exelixis the most efficient among its peers in generating returns relative to its cost of capital. This positions Exelixis as a potentially attractive investment for those seeking companies with strong profitability.
