Arlo Technologies (ARLO)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -30,504 | -22,036 | -56,626 | -56,029 | -101,251 |
| Total stockholders’ equity | US$ in thousands | 100,909 | 103,276 | 87,695 | 112,652 | 133,767 |
| ROE | -30.23% | -21.34% | -64.57% | -49.74% | -75.69% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-30,504K ÷ $100,909K
= -30.23%
Based on the data provided, Arlo Technologies has experienced fluctuations in its return on equity (ROE) over the past five years.
As of December 31, 2020, the ROE was -75.69%, indicating that the company's net income may not have been generating substantial returns relative to shareholders' equity. This negative ROE suggests that Arlo Technologies was facing challenges in leveraging its equity effectively to generate profits.
By December 31, 2021, the ROE improved slightly to -49.74%, but still remained negative. This could indicate that the company's profitability was still below optimal levels and that performance was not meeting expectations.
However, by December 31, 2022, the ROE decreased to -64.57%, signaling a decline in profitability compared to the previous year. This negative trend may raise concerns about the company's ability to generate returns for its shareholders.
On December 31, 2023, there was a notable improvement in the company's ROE, which stood at -21.34%. While still negative, this indicates that Arlo Technologies made progress in utilizing its equity more efficiently to generate returns.
As of December 31, 2024, the ROE was -30.23%, suggesting a slight decline in profitability compared to the previous year. Although the ROE improved from the lowest point in the past five years, it still remains negative, indicating room for further enhancement in effectively utilizing shareholders' equity to generate profits.
Overall, the fluctuating and predominantly negative ROE of Arlo Technologies over the past five years indicates challenges in maximizing profitability relative to shareholders' equity. The company may need to focus on improving operational efficiency, cost management, and revenue generation strategies to enhance its return on equity in the future.
Peer comparison
Dec 31, 2024