Veracyte Inc (VCYT)

Return on total capital

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 35,768 26,862 23,790 -10,123 -56,742 -71,496 -77,672 -51,477 -30,521 -30,750 -37,069 -43,954 -50,558 -50,108 -81,315 -77,895 -66,543 -68,467 -34,453 -34,090
Long-term debt US$ in thousands — — — — — — — — — — — — — — — — — — — —
Total stockholders’ equity US$ in thousands 1,221,060 1,194,940 1,175,970 1,176,040 1,132,520 1,118,650 1,044,100 1,054,060 1,082,720 1,081,260 1,075,200 1,048,180 1,064,150 1,085,190 1,096,510 1,107,080 971,177 974,231 421,232 422,725
Return on total capital 2.93% 2.25% 2.02% -0.86% -5.01% -6.39% -7.44% -4.88% -2.82% -2.84% -3.45% -4.19% -4.75% -4.62% -7.42% -7.04% -6.85% -7.03% -8.18% -8.06%

June 30, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $35,768K ÷ ($—K + $1,221,060K)
= 2.93%

The analysis of Veracyte Inc’s return on total capital (ROTC) over the specified period reveals a trajectory characterized by initial negative values, gradual improvement, and signs of potential normalization. From September 30, 2020, through December 31, 2024, the company’s ROTC remained consistently negative, signaling an ongoing challenge in generating positive returns relative to its total capital base. Specifically, the ROTC declined from -8.06% in September 2020 to a low of -8.18% at the end of 2020, reflecting increasingly limited efficiency in deploying capital during that period.

Throughout 2021 and into early 2022, a modest upward trend is evident. The ROTC moved closer to breakeven, improving from approximately -7% to around -4.6%, indicating a gradual recovery in operational efficiency or profit generation relative to capital invested. This trend continued into mid-2022, where the ROTC showed signs of marginal improvement, reaching -4.75% by June 2022 and -4.19% by September 2022. The data suggests some operational or strategic adjustments may have contributed to this positive movement.

From the end of 2022 onward, the ROTC exhibited a consistent upward trend, moving towards positive territory. Notably, by December 31, 2022, the ROTC had improved to -3.45%, and further progress was observed through early 2023, with figures such as -2.84% in March 2023 and -2.82% in June 2023. The continued upward movement indicates ongoing efforts to enhance capital efficiency and profitability.

However, in the latter part of 2023, the metric declined again, with the ROTC dropping to -4.88% by September 2023. Subsequently, at the end of 2023, the value was -7.44%. This reversal signals potential challenges or setbacks affecting the company's ability to generate positive returns on its total capital.

Interestingly, early 2024 marks a significant turning point. The ROTC shifted from negative to positive territory, reaching 2.02% by December 31, 2024, which suggests meaningful improvements in operational performance or capital management. This positive trend continued into 2025 with the ROTC rising further to 2.25% in March and 2.93% by June 2025, indicating the company’s increased efficiency in leveraging its total capital to produce returns.

In summary, Veracyte Inc’s historical ROTC data illustrates a long-term period of negative returns with intermittent improvements, culminating in a positive turnaround commencing in late 2024 and extending into mid-2025. This trajectory reflects a noteworthy evolution in the company’s ability to generate value relative to its aggregate capital base over the analyzed period.