NeoGenomics Inc (NEO)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -87,968 | -144,250 | -8,347 | 4,172 | 8,006 |
| Total stockholders’ equity | US$ in thousands | 941,537 | 998,023 | 1,108,280 | 694,294 | 507,408 |
| ROE | -9.34% | -14.45% | -0.75% | 0.60% | 1.58% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-87,968K ÷ $941,537K
= -9.34%
Neogenomics Inc.'s Return on Equity (ROE) has shown a declining trend over the past five years. In 2019, the ROE was at 1.58%, indicating that the company generated $1.58 in profit for every dollar of shareholder's equity. However, in subsequent years, the ROE steadily decreased to -9.34% in 2023, implying that the company experienced a negative return on equity, possibly due to lower net income or a significant increase in equity.
The negative ROE figures in 2022 and 2023 suggest that the company's profitability relative to its equity has deteriorated, with the company potentially facing challenges in effectively utilizing its equity to generate profits for shareholders. The declining trend in ROE could raise concerns among investors about the company's financial performance and management efficiency in generating returns on shareholder investments.
It would be essential for Neogenomics Inc. to assess the factors contributing to the declining ROE and implement strategies to improve profitability and operational efficiency. Additionally, management should focus on optimizing the allocation of resources and enhancing performance to generate higher returns for shareholders in the future.