InPost's (AMS:INPST) Returns On Capital Are Heading Higher

Simply Wall St
·3 min read

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So when we looked at InPost (AMS:INPST) and its trend of ROCE, we really liked what we saw.

What Is Return On Capital Employed (ROCE)?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for InPost:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.14 = zł933m ÷ (zł8.2b - zł1.7b) (Based on the trailing twelve months to September 2022).

So, InPost has an ROCE of 14%. By itself that's a normal return on capital and it's in line with the industry's average returns of 14%.

Check out our latest analysis for InPost

roce
roce

In the above chart we have measured InPost's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free report for InPost.

So How Is InPost's ROCE Trending?

InPost has recently broken into profitability so their prior investments seem to be paying off. The company was generating losses five years ago, but now it's earning 14% which is a sight for sore eyes. In addition to that, InPost is employing 1,028% more capital than previously which is expected of a company that's trying to break into profitability. We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance.

One more thing to note, InPost has decreased current liabilities to 21% of total assets over this period, which effectively reduces the amount of funding from suppliers or short-term creditors. Therefore we can rest assured that the growth in ROCE is a result of the business' fundamental improvements, rather than a cooking class featuring this company's books.

The Bottom Line On InPost's ROCE

To the delight of most shareholders, InPost has now broken into profitability. And since the stock has fallen 20% over the last year, there might be an opportunity here. With that in mind, we believe the promising trends warrant this stock for further investigation.

One more thing to note, we've identified 1 warning sign with InPost and understanding it should be part of your investment process.

While InPost 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.

Have 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • Jack Grealish interview: I lost confidence at start of season – but have no issue with Pep Guardiola

    He is an open book, Jack Grealish. Sponsors love him because he brings such authenticity to those commercial shoots and, for the community and charitable arms at Aston Villa, Manchester City and England, there is a genuine warmth and sincerity to his interactions with fans and the public alike. What you see with Grealish is what you get. Charming, lovable, charismatic – above all real.

  • Inuvik elder Gerry Kisoun to be the N.W.T.'s next commissioner

    Gerry Kisoun will be the next commissioner of the Northwest Territories, according to an announcement from Prime Minister Justin Trudeau's office on Friday afternoon. The Inuvialuit-Gwich'in elder worked for the RCMP for 25 years, serving in Tuktoyaktuk and Inuvik, as well as in Alberta and the Yukon according to his biography. After retiring from the RCMP, Kisoun worked for Parks Canada for 17 years in its Western Arctic Field Unit. He was also previously the deputy commissioner of the N.W.T. f

  • Mowachaht/Muchalaht soon to open Baymont by Wyndam hotel with tourism information services

    By Alexandra Mehl Gold River, BC - This spring Mowachaht/Muchalaht First Nation (MMFN) will be opening the doors of their new hotel, Baymont by Wyndam, previously known as the Gold River Chalet, alongside new tourism information services aiming to bring more visitors to the region. Gold River Chalet closed its doors in April of 2023, according to the hotel manager Rohinton (Roy) Kharadi. Over the last year the building underwent “complete renovations,” he noted. “Total wow,” said Kharadi, when a

  • Family-owned ranch in Pasco County gives horses, donkeys second chance at life

    It’s a family affair, and the animals become family as well. They work to rescue, rehab, retrain, and rehome these animals. “We are here to give the horse a next job in its life and to find their person,” said Tammy Stricker, Coordinator at Stricker Sunshine Rescue Ranch. Tammy and Al Stricker built Stricker Sunshine Rescue Ranch out of passion and love for these animals.

  • Brixton Academy opens doors again more than a year after fatal crush

    The venue had heavy security for the reopening.

  • Sault recreational lock closed until August

    A major tourist waterway will be off limits until the late summer to allow construction crews to complete some work on a nearby historic building. Since low water levels are required to continue restorative work on the Powerhouse building's foundation, the canal's recreational lock must be closed until around August, Parks Canada officials say. The recreational lock, opened in 1998, allows recreational boaters and tourist vessels to pass between Lake Superior and Lake Huron by changing the water

  • Dow Jones Futures: S&P 500 Has Worst Week In Year As Nvidia, Super Micro, AI Leaders Plunge

    The Nasdaq had its worst week since 2022 as AI stocks Nvidia and Super Micro flashed sell signals. Tesla, Microsoft, Meta lead earnings on tap.

  • Bitcoin halving: How will crypto miners be affected?

    Investors are anticipating the bitcoin (BTC-USD) halving event in the near future, as soon as this weekend. The price of bitcoin has retreated from its recent highs and is currently trading above $64,000 as of Friday. During this event, the reward for mining new bitcoin blocks is cut in half, slowing down the rate at which new bitcoins are introduced into circulation. Yahoo Finance's Julie Hyman and Madison Mills break down the details, providing insights into the implications for bitcoin miners' profit margins. Want to learn more about the bitcoin halving? Watch this video from Yahoo Finance for a quick explainer: Bitcoin halving: Explained For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime. This post was written by Angel Smith

  • Woman missing for weeks may be in Arizona state park, family says. ‘We are devastated’

    “We need all the help we can get to help find her and find answers.”

  • Met apologises for ‘openly Jewish’ comment – then is forced to apologise again for ‘victim blaming’ statement

    Double apology from force after officer uses term ‘openly Jewish’ to antisemitism campaigner

  • Tampa's food scene spotlighted with Michelin Star additions

    It’s a huge deal in the restaurant industry: being recognized by the Michelin Guide. A few more restaurants in Tampa landed on that list. Inside Streetlight Taco in Tampa on any given afternoon, you'll find people sitting elbow to elbow waiting to take a bite of something tasty. “I've always been passionate about Mexican food and the people and the culture, and I had a great opportunity to kind of live my dream,” said Michael Brannock, the chef and partner at Streetlight Taco.

  • Man sets himself on fire outside Trump trial court

    A man set himself on fire outside the New York court where Donald Trump’s hush money trial was being held on Friday.

  • Gov. Moore "incredibly encouraged" on efforts to secure federal funding for bridge rebuild

    An aerial view of the wreckage draped across the bow of the Dali provides a clearer picture of the work crews still have cut out for them. "This is the road. That is literally the road from the Key Bridge that's sitting on top of the ship," Governor Moore said as he showed reporters the image during a Friday press conference.

  • Stars waited late to find out they get playoff rematch against the defending Stanley Cup champions

    FRSICO, Texas (AP) — Tyler Seguin got sidetracked on his way to bed when he checked the scores from the two games on the West Coast that would determine who the Dallas Stars would face in the first round of the NHL playoffs. “I went in the living room just to see what was going on,” Seguin said in the Stars locker room Friday. Matt Duchene was watching as well from his home late Thursday night, and kept waking up his wife to tell her who the Stars would be playing. That changed a couple of times

  • Jameson Taillon comes off the injured list and helps the Cubs beat the Marlins 8-3

    CHICAGO (AP) — Jameson Taillon had a solid first start, Nico Hoerner doubled twice and the Cubs rolled past the Miami Marlins 8-3 on Friday. Taillon (1-0), reinstated from the injured list a day earlier, retired the first 10 Miami batters before Bryan De La Cruz smacked his fourth homer of the season. By then, the Cubs had a six-run cushion. They’ve won two straight and five of six. The Cubs tagged A.J. Puk (0-4) for a pair of runs in the first inning and ended his day with a four-run third capp

  • Could a stealth juror derail Trump’s trial?

    Defence and prosecution worked during jury selection to root out those ‘hell-bent’ on either conviction or acquittal, Gustaf Kilander and Alex Woodward write

  • After near-miss, FAA introduces new scheduling rules for air traffic controllers

    One day after a near-miss involving a Boston-bound JetBlue flight in Washington, DC, the FAA is introducing new rules for the scheduling of air traffic controllers.

  • Leafs, Jets, Oilers and Canucks carry Canada's Cup hopes with drought at 30 years

    Josh Morrissey remembers the city coming to life before his eyes. A nine-year-old Flames fan in the spring of 2004, he was captivated by every Jarome Iginla chance and Miikka Kiprusoff save during Calgary's run to the Stanley Cup final. "It was just an awesome experience," said Morrissey, now a star defenceman for the Winnipeg Jets. "Living and dying on every win and loss." Hockey fans across Canada are once again preparing themselves to experience that annual thrill and torment. The Jets, Vanco

  • Minority stake of Buffalo Bills for sale

    7 News has learned the Buffalo Bills are open to selling a minority stake of the team. The news was first reported by Tim Graham of The Athletic.

  • The Latest | Opening statements in Trump hush money trial set for Monday after latest appeal fails

    NEW YORK (AP) — Opening statements in Donald Trump's hush money case are set to begin next week after a jury of 12 people and six alternates was seated Friday. The seating of the jury sets the stage for weeks of testimony in a case charging Trump with falsifying business records to suppress stories about his sex life emerging in the final days of the 2016 election. A failed last-minute bid in appeals court by the former president’s lawyers to stay the trial, as well as a hearing to decide whethe