Innovex International, Inc (INVX)

Return on equity (ROE)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income US$ in thousands 140,325 73,926 63,278 9,853 -30,768
Total stockholders’ equity US$ in thousands 958,156 328,921 251,280 180,551 1,041,530
ROE 14.65% 22.48% 25.18% 5.46% -2.95%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $140,325K ÷ $958,156K
= 14.65%

The analysis of Innovex International, Inc.'s return on equity (ROE) over the specified period reveals significant fluctuations indicative of the company's evolving financial performance and strategic positioning. As of December 31, 2020, the company reported a negative ROE of -2.95%, suggesting that it was not generating sufficient profit relative to shareholders’ equity, likely indicating operational difficulties or losses during that period.

Subsequently, by December 31, 2021, the ROE improved markedly to 5.46%. This positive shift implies an enhancement in profitability and operational efficiency, reflecting a recovery phase or successful implementation of strategic initiatives aimed at profitability improvement.

The year ending December 31, 2022, saw a substantial increase in ROE to 25.18%. This surge signifies a remarkable profitability level, potentially driven by increased revenues, better cost management, or some form of leverage effect. Such a high ROE indicates that the company generated substantial returns on shareholders' equity during this year, positioning it as a highly efficient profit generator relative to its equity base.

However, the subsequent decline in ROE to 22.48% as of December 31, 2023, suggests a moderation in profitability. While still robust, the decrease from the prior year may point to increased expenses, market pressures, or other operational factors affecting net income relative to shareholders' equity.

Looking into 2024, the ROE further decreased to 14.65%, indicating a notable decline in profitability. This downward trend could be attributable to various factors such as intensified competition, higher capital requirements, or operational challenges impacting net income. Despite the decline, the ROE remains positive and above historical lows, suggesting that the company continues to generate a return on shareholders’ equity at a respectable level, albeit with diminishing efficiency.

Overall, Innovex International, Inc.’s ROE trajectory reflects a period of initial losses, substantial recovery and high profitability, followed by a gradual decline. These movements highlight the importance of monitoring the company’s operational strategies, market conditions, and financial leverage, which collectively influence the sustainability of its profitability relative to equity.