- BlackBerry Limited (NYSE:BB) has a Return on Invested Capital (ROIC) of -16.15%, indicating inefficiencies in capital utilization compared to its competitors.
- GameStop Corp. (NYSE:GME) and Palantir Technologies Inc. (NYSE:PLTR) show more favorable capital utilization with positive ROIC to WACC ratios.
- BlackBerry’s negative ROIC to WACC ratio of -1.88 highlights significant challenges in generating returns to cover its cost of capital.
BlackBerry Limited (NYSE:BB) is a technology company known for its software and services, particularly in cybersecurity and the Internet of Things (IoT). Once a leader in the smartphone market, BlackBerry has shifted its focus to software solutions. Its competitors include companies like AMC Entertainment Holdings, Inc. (NYSE:AMC), GameStop Corp. (NYSE:GME), SNDL Inc. (NASDAQ:SNDL), Clover Health Investments, Corp. (NASDAQ:CLOV), and Palantir Technologies Inc. (NYSE:PLTR).
In evaluating BlackBerry’s financial performance, the Return on Invested Capital (ROIC) is a critical metric. BlackBerry’s ROIC is -16.15%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 8.57%. This negative ROIC to WACC ratio of -1.88 indicates that BlackBerry is not generating enough returns to cover its cost of capital, highlighting inefficiencies in capital utilization.
Comparatively, AMC Entertainment Holdings has a ROIC of -1.64% and a WACC of 6.17%, resulting in a ROIC to WACC ratio of -0.27. Although AMC’s ratio is negative, it is less severe than BlackBerry’s, suggesting slightly better capital efficiency. GameStop Corp. shows a positive ROIC of 0.80% against a WACC of 4.84%, with a ROIC to WACC ratio of 0.17, indicating a more favorable capital utilization than BlackBerry.
SNDL Inc. and Clover Health Investments also exhibit negative ROIC to WACC ratios of -0.49 and -0.51, respectively. SNDL’s ROIC is -8.38% with a WACC of 17.05%, while Clover Health has a ROIC of -6.61% and a WACC of 13.05%. Both companies, like BlackBerry, are not covering their cost of capital, but their ratios are less negative than BlackBerry’s.
Palantir Technologies stands out with a positive ROIC to WACC ratio of 0.41, the highest among the peers. With a ROIC of 6.72% and a WACC of 16.40%. This suggests that Palantir has better capital management and growth potential compared to BlackBerry and its other peers.
