With A 10% Return On Equity, Is Jazz Pharmaceuticals plc (NASDAQ:JAZZ) A Quality Stock?

Simply Wall St.10-29

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to ...

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We'll use ROE to ...</p>\n\n<a href=\"https://finance.yahoo.com/news/10-return-equity-jazz-pharmaceuticals-104153089.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":"BK4112","symbol_name":"金融交易所和数据","start_time":0,"source_url":"https://finance.yahoo.com/news/10-return-equity-jazz-pharmaceuticals-104153089.html","article_id":"2479477450","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/H9sVDVM9mi9ws1HvXhxW7w--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/8b2f1fb8ed1ddbd9c7702732b1ea0316"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2479477450","pubTimestamp":1730198513,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"While some investors are already well versed in financial metrics , this article is for those who would like to learn about Return On Equity  and why it is important. We'll use ROE to examine Jazz Pharmaceuticals plc , by way of a worked example.ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.Check out our latest analysis for Jazz Pharmaceuticals. Return on equity can be calculated by using the formula:. Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for Jazz Pharmaceuticals is:. Does Jazz Pharmaceuticals Have A Good Return On Equity?By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same indust","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4112":"金融交易所和数据","EQR":"资产住宅公司","ROE":"ASTORIA US QUALITY KINGS ETF","BK4532":"文艺复兴科技持仓","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","LU0320765992.SGD":"FTIF - Franklin Biotechnology Discovery A Acc SGD","BK4215":"住宅房地产投资信托","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","LU0109394709.USD":"富兰克林生物科技新领域基金A (acc)","BK4585":"ETF&股票定投概念","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","SQQQ":"纳指三倍做空ETF","JAZZ":"爵士制药","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4007":"制药","QID":"纳指两倍做空ETF","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","TQQQ":"纳指三倍做多ETF","NDAQ":"纳斯达克OMX交易所","BK4588":"碎股","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","PSQ":"纳指反向ETF",".IXIC":"NASDAQ Composite","QLD":"纳指两倍做多ETF","LU0889565916.HKD":"FRANKLIN BIOTECHNOLOGY DISCOVERY \"A\" (HKD) ACC"},"translate_title":"Jazz Pharmaceuticals plc（纳斯达克股票代码：JAZZ）的股本回报率为10%，是一只优质股票吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ROE":1,"NDAQ":1,"EQR":1,".IXIC":1,"JAZZ":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine Jazz Pharmaceuticals plc (NASDAQ:JAZZ), by way of a worked example. \n ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. \n Check out our latest analysis for Jazz Pharmaceuticals \n How To Calculate Return On Equity? \n Return on equity can be calculated by using the formula: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for Jazz Pharmaceuticals is:\n10% = US$395m ÷ US$3.8b (Based on the trailing twelve months to June 2024).\n The 'return' is the yearly profit. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.10 in profit. \n Does Jazz Pharmaceuticals Have A Good Return On Equity? \n By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As shown in the graphic below, Jazz Pharmaceuticals has a lower ROE than the average (21%) in the Pharmaceuticals industry classification. \n\n\n\n  NasdaqGS:JAZZ Return on Equity October 29th 2024\n \n\n That certainly isn't ideal. That being said, a low ROE is not always a bad thing, especially if the company has low leverage as this still leaves room for improvement if the company were to take on more debt. When a company has low ROE but high debt levels, we would be cautious as the risk involved is too high. You can see the 2 risks we have identified for Jazz Pharmaceuticals by visiting our risks dashboard for free  on our platform here. \n How Does Debt Impact Return On Equity? \n Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. \n Jazz Pharmaceuticals' Debt And Its 10% ROE \n It's worth noting the high use of debt by Jazz Pharmaceuticals, leading to its debt to equity ratio of 1.52. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time. \n Summary \n Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. \n But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to take a peek at this data-rich interactive graph of forecasts for the company. \n Of course Jazz Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt. \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":"0","news_tag":"","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/2479477450"}