Innovex International, Inc (INVX)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	49,075	97,282	76,552	14,077	-18,702
Total assets	US$ in thousands	1,197,480	1,028,180	436,286	284,895	1,151,170
Operating ROA		4.10%	9.46%	17.55%	4.94%	-1.62%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $49,075K ÷ $1,197,480K
= 4.10%

Analyzing the operating return on assets (ROA) of Innovex International, Inc. over the specified period reveals significant fluctuations in operational efficiency. As of December 31, 2020, the company exhibited an operating ROA of -1.62%, indicating that the company's core operations were not generating sufficient income to cover its asset base, resulting in a net loss from operations relative to its assets.

By December 31, 2021, the operating ROA improved substantially to 4.94%. This positive shift suggests a notable enhancement in operational performance and efficiency, allowing the company to utilize its assets more effectively to generate operating income.

The year-end data for December 31, 2022, demonstrates a further robust increase in operating ROA to 17.55%. This marked improvement indicates a strong operational turnaround, with the company likely benefiting from increased revenues, cost efficiencies, or a combination of both—leading to significantly higher operating income relative to its asset base.

However, in the subsequent period ending December 31, 2023, the operating ROA declined to 9.46%. Despite remaining positive, this decrease suggests some challenges emerged, possibly due to increased expenses, reduced margins, or asset base changes impacting operational profitability.

Finally, as of December 31, 2024, the operating ROA further decreased to 4.10%, approaching levels closer to those observed at the start of the period. This trend may reflect ongoing operational pressures, potential asset devaluations, or increased investment costs reducing overall operating efficiency.

In summary, the company's operating ROA experienced a significant upward trajectory from negative territory in 2020 to a peak in 2022, followed by a downward adjustment over the subsequent two years. The recent decline indicates a possible moderation in operational performance, warranting further investigation into underlying factors such as revenue trends, cost management, and asset utilization strategies.