These Return Metrics Don't Make National Vision Holdings (NASDAQ:EYE) Look Too Strong

Simply Wall St.09-07

What underlying fundamental trends can indicate that a company might be in decline? When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, ...

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When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/return-metrics-dont-national-vision-172754411.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>These Return Metrics Don't Make National Vision Holdings (NASDAQ:EYE) Look Too Strong</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThese Return Metrics Don't Make National Vision Holdings (NASDAQ:EYE) Look Too Strong\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-07 01:27 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/return-metrics-dont-national-vision-172754411.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What underlying fundamental trends can indicate that a company might be in decline? When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/return-metrics-dont-national-vision-172754411.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":".IXIC","symbol_name":"NASDAQ Composite","start_time":0,"source_url":"https://finance.yahoo.com/news/return-metrics-dont-national-vision-172754411.html","article_id":"2465643744","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/586eiHPvSTNDX.7t2BsuFw--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/f93769003b780aae69f8c11146cdf5a4"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2465643744","pubTimestamp":1725643674,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"What underlying fundamental trends can indicate that a company might be in decline?When we see a declining return on capital employed  in conjunction with a declining base of capital employed, that's often how a mature business shows signs of aging. Ultimately this means that the company is earning less per dollar invested and on top of that, it's shrinking its base of capital employed. Having said that, after a brief look, National Vision Holdings  we aren't filled with optimism, but let's investigate further.If you haven't worked with ROCE before, it measures the 'return'  a company generates from capital employed in its business. The formula for this calculation on National Vision Holdings is:. Return on Capital Employed = Earnings Before Interest and Tax  ÷ . Check out our latest analysis for National Vision Holdings. In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock. Long term shareholders who've","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{".IXIC":"NASDAQ Composite","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","QID":"纳指两倍做空ETF","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","LU1559883803.SGD":"Aberdeen Standard SICAV I - North American Smaller Companies Fund A Acc SGD-H","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","NDAQ":"纳斯达克OMX交易所","LU0053671581.USD":"摩根大通美国小盘成长股 A(dist)","BK4200":"专卖店","SQQQ":"纳指三倍做空ETF","BK4112":"金融交易所和数据","EYE":"National Vision","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","QLD":"纳指两倍做多ETF","BK4588":"碎股","TQQQ":"纳指三倍做多ETF","PSQ":"纳指反向ETF","BK4585":"ETF&股票定投概念","LU0566484027.USD":"安本美国小盘成长股","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD"},"translate_title":"这些回报指标并没有让National Vision Holdings（纳斯达克：EYE）看起来太强大","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EBIT":1,"EYE":1,"NDAQ":1,".IXIC":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"What underlying fundamental trends can indicate that a company might be in decline? When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, that's often how a mature business shows signs of aging. Ultimately this means that the company is earning less per dollar invested and on top of that, it's shrinking its base of capital employed. Having said that, after a brief look, National Vision Holdings (NASDAQ:EYE) we aren't filled with optimism, but let's investigate further. \n Understanding Return On Capital Employed (ROCE) \n If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on National Vision Holdings is: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.023 = US$34m ÷ (US$2.1b - US$663m) (Based on the trailing twelve months to June 2024).\n So, National Vision Holdings has an ROCE of 2.3%.  In absolute terms, that's a low return and it also under-performs the Specialty Retail industry average of 12%. \n Check out our latest analysis for National Vision Holdings \n\n\n\n  NasdaqGS:EYE Return on Capital Employed September 6th 2024\n \n\n Above you can see how the current ROCE for National Vision Holdings compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering National Vision Holdings  for free. \n What Can We Tell From National Vision Holdings' ROCE Trend? \n In terms of National Vision Holdings' historical ROCE movements, the trend doesn't inspire confidence. About five years ago, returns on capital were 3.1%, however they're now substantially lower than that as we saw above. Meanwhile, capital employed in the business has stayed roughly the flat over the period. This combination can be indicative of a mature business that still has areas to deploy capital, but the returns received aren't as high due potentially to new competition or smaller margins. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on National Vision Holdings becoming one if things continue as they have. \n While on the subject, we noticed that the ratio of current liabilities to total assets has risen to 31%, which has impacted the ROCE. If current liabilities hadn't increased as much as they did, the ROCE could actually be even lower. Keep an eye on this ratio, because the business could encounter some new risks if this metric gets too high. \n Our Take On National Vision Holdings' ROCE \n In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock. Long term shareholders who've owned the stock over the last five years have experienced a 67% depreciation in their investment, so it appears the market might not like these trends either. That being the case, unless the underlying trends revert to a more positive trajectory, we'd consider looking elsewhere. \n National Vision Holdings could be trading at an attractive price in other respects, so you might find our  free intrinsic value estimation for EYE  on our platform quite valuable. \n While National Vision Holdings may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"Business Data","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2465643744"}