SOPH’s Return on Invested Capital (ROIC) is -52.00%, indicating it is not generating sufficient returns to cover its cost of capital.
Comparative analysis shows peers like Rapid Micro Biosystems and Singular Genomics Systems also struggle with negative ROIC against their WACC.
Absci Corporation has the highest ROIC to WACC ratio among the peers, suggesting a relatively better capital efficiency.
SOPHiA GENETICS SA (NASDAQ:SOPH) is a company that specializes in data-driven medicine, providing a cloud-based platform for healthcare professionals to analyze genomic and radiomic data. This platform aids in the diagnosis and treatment of diseases, making SOPH a key player in the healthcare technology sector. Its competitors include companies like Rapid Micro Biosystems, Singular Genomics Systems, Rallybio Corporation, Absci Corporation, and Candel Therapeutics.
In evaluating SOPH’s financial performance, the Return on Invested Capital (ROIC) is a critical metric. SOPH’s ROIC stands at -52.00%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 8.38%. This negative ROIC indicates that SOPH is not generating enough returns to cover its cost of capital, a situation that can hinder its financial sustainability.
Comparing SOPH to its peers, Rapid Micro Biosystems (RPID) has an even lower ROIC of -61.04% with a WACC of 8.91%, resulting in a ROIC to WACC ratio of -6.85. Singular Genomics Systems (OMIC) also shows a negative ROIC of -55.79% against a WACC of 7.50%, leading to a ratio of -7.44. These figures suggest that both companies are also struggling to generate returns above their cost of capital.
Rallybio Corporation (RLYB) and Candel Therapeutics (CADL) present more severe cases, with ROICs of -101.22% and -215.90%, respectively. Their WACCs are 4.94% and 4.81%, resulting in ROIC to WACC ratios of -20.48 and -44.93. These numbers highlight significant challenges in achieving capital efficiency, which is crucial for their financial health.
Among the peers, Absci Corporation (ABSI) has the highest ROIC to WACC ratio of -3.58, with a ROIC of -48.45% and a WACC of 13.55%. Although still negative, ABSI’s ratio indicates a relatively better position in managing its capital compared to its cost. This analysis underscores the importance of improving capital efficiency for these companies to ensure long-term growth and stability.
