Sequans Communications S.A. (NYSE:SQNS) showcases a high Return on Invested Capital (ROIC) of 33.85%, indicating efficient capital utilization.
Its ROIC to WACC ratio of 3.34 significantly outperforms peers, highlighting Sequans’ superior ability to generate returns above its cost of capital.
Akoustis Technologies, Inc. presents an exceptional case with a ROIC to WACC ratio of 102.47, surpassing Sequans and other competitors in capital efficiency.
Sequans Communications S.A. (NYSE:SQNS) is a company that specializes in the development and delivery of 4G and 5G chips and modules for broadband, critical, and massive IoT applications. The company operates in a competitive landscape with peers like GoHealth, Inc., KORU Medical Systems, Inc., Akoustis Technologies, Inc., NexTech AR Solutions Corp., and Lantronix, Inc.
In evaluating Sequans, the Return on Invested Capital (ROIC) is a key metric. With a ROIC of 33.85%, Sequans effectively uses its capital to generate returns. This is significantly higher than its Weighted Average Cost of Capital (WACC) of 10.14%, resulting in a ROIC to WACC ratio of 3.34. This ratio indicates that Sequans is generating returns well above its cost of capital, showcasing efficient capital utilization.
When comparing Sequans to its peers, the contrast is evident. For instance, GoHealth, Inc. has a negative ROIC of -8.38% against a WACC of 10.66%, resulting in a ROIC to WACC ratio of -0.79. This suggests that GoHealth is not generating sufficient returns to cover its cost of capital, unlike Sequans.
Similarly, KORU Medical Systems, Inc. and NexTech AR Solutions Corp. also show negative ROIC to WACC ratios of -11.60 and -1.87, respectively. These figures highlight their struggles in capital efficiency compared to Sequans. Lantronix, Inc. also falls short with a ratio of -0.26, further emphasizing Sequans’ stronger performance.
However, Akoustis Technologies, Inc. stands out with an extraordinary ROIC to WACC ratio of 102.47, driven by a ROIC of 552.92% and a WACC of 5.40%. This indicates a remarkable ability to generate returns far exceeding its cost of capital, surpassing Sequans and all other peers in terms of capital efficiency.
