Informatica Inc. (NYSE:INFA) has a Return on Invested Capital (ROIC) of 0.58%, significantly lower than its Weighted Average Cost of Capital (WACC) of 10.83%, indicating inefficiency in creating value for shareholders.
Comparatively, Commvault Systems, Inc. stands out with a ROIC of 32.96% and a WACC of 6.93%, suggesting highly efficient capital use.
Manhattan Associates, Inc. leads with a ROIC of 59.93% and a WACC of 10.91%, showcasing strong financial performance and efficient capital utilization.
Informatica Inc. (NYSE:INFA) is a company that specializes in enterprise cloud data management and data integration. It provides solutions that help businesses manage and integrate their data across various platforms. Informatica operates in a competitive landscape with peers like Open Text Corporation, Commvault Systems, Inc., Manhattan Associates, Inc., and Progress Software Corporation, each offering distinct data management and software solutions.
Informatica’s Return on Invested Capital (ROIC) is 0.58%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 10.83%. This indicates that the company is not generating returns that exceed its cost of capital, which is a critical measure of financial performance. A ROIC lower than WACC suggests that the company may not be using its capital efficiently to create value for shareholders.
In comparison, Open Text Corporation has a ROIC of 5.92% and a WACC of 7.57%, resulting in a ROIC to WACC ratio of 0.782. This shows that Open Text is generating returns closer to its cost of capital, indicating a more balanced financial performance. Commvault Systems, Inc. stands out with a ROIC of 32.96% and a WACC of 6.93%, leading to a ROIC to WACC ratio of 4.759, which suggests a highly efficient use of capital.
Manhattan Associates, Inc. is the leader among the peers with a ROIC of 59.93% and a WACC of 10.91%, resulting in a ROIC to WACC ratio of 5.493. This indicates that Manhattan Associates is generating returns far above its cost of capital, highlighting its strong financial performance and efficient capital utilization. Progress Software Corporation, with a ROIC of 4.61% and a WACC of 6.90%, has a ROIC to WACC ratio of 0.669, showing moderate efficiency in capital use.
Overall, Informatica Inc. is underperforming in terms of ROIC compared to its WACC, which is not favorable for value creation. In contrast, Manhattan Associates, Inc. demonstrates the most efficient use of capital among the peers, with a robust ROIC to WACC ratio, indicating strong potential for growth and value creation.
