Veracyte Inc (VCYT)

Return on equity (ROE)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income US$ in thousands 24,138 -74,404 -36,560 -75,563 -35,847
Total stockholders’ equity US$ in thousands 1,175,970 1,044,100 1,075,200 1,096,510 421,232
ROE 2.05% -7.13% -3.40% -6.89% -8.51%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $24,138K ÷ $1,175,970K
= 2.05%

The data for Veracyte Inc. indicates a noteworthy evolution in its return on equity (ROE) over the period from December 31, 2020, to December 31, 2024. Initially, at the end of 2020, the company exhibited a negative ROE of -8.51%, signifying that it was not generating sufficient profit relative to shareholders' equity and potentially facing challenges in profitability or operational efficiency at that time. This negative trend persisted through 2021 and 2022, with the ROE improving somewhat from -6.89% in 2021 to -3.40% in 2022, indicating a gradual, albeit limited, enhancement in net income relative to equity.

The subsequent period displayed a decline in ROE from -3.40% at the end of 2022 to -7.13% by the end of 2023, reversing some of the earlier gains and reflecting increased challenges in generating returns on shareholders' investments during that year.

However, a significant positive shift is evidenced in the 2024 figure, where ROE turns positive at 2.05%. This transition from negative to positive territory suggests that Veracyte has begun to realize income that exceeds shareholders’ equity, signaling a potential improvement in profitability, operational efficiency, or other financial strategies implemented by management.

Overall, the trend indicates a period of difficulty in achieving positive returns on equity, but recent positive movement in 2024 provides a promising sign of possible financial recovery or enhanced operational performance. Continuous evaluation of additional financial metrics and operational factors would be necessary to confirm the sustainability of this turnaround and to understand the underlying drivers contributing to these changes.