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2 minutes ago
- Yahoo
Has Waystar Holding Corp. (NASDAQ:WAY) Stock's Recent Performance Got Anything to Do With Its Financial Health?
Most readers would already know that Waystar Holding's (NASDAQ:WAY) stock increased by 4.2% over the past three months. As most would know, long-term fundamentals have a strong correlation with market price movements, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. Specifically, we decided to study Waystar Holding's ROE in this article. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. How Do You Calculate Return On Equity? The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Waystar Holding is: 0.8% = US$26m ÷ US$3.1b (Based on the trailing twelve months to March 2025). The 'return' is the yearly profit. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.01 in profit. Check out our latest analysis for Waystar Holding What Is The Relationship Between ROE And Earnings Growth? We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. A Side By Side comparison of Waystar Holding's Earnings Growth And 0.8% ROE It is quite clear that Waystar Holding's ROE is rather low. Not just that, even compared to the industry average of 5.3%, the company's ROE is entirely unremarkable. In spite of this, Waystar Holding was able to grow its net income considerably, at a rate of 25% in the last five years. We believe that there might be other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Next, on comparing Waystar Holding's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 25% over the last few years. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. Is WAY fairly valued? This infographic on the company's intrinsic value has everything you need to know. Is Waystar Holding Making Efficient Use Of Its Profits? Waystar Holding doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above. Summary Overall, we feel that Waystar Holding certainly does have some positive factors to consider. Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14 minutes ago
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EU to Force Car-Rental Firms to Buy EVs Only From 2030: Bild
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32 minutes ago
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Should You Think About Buying Life Time Group Holdings, Inc. (NYSE:LTH) Now?
Life Time Group Holdings, Inc. (NYSE:LTH), is not the largest company out there, but it saw a decent share price growth of 14% on the NYSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Let's take a look at Life Time Group Holdings's outlook and value based on the most recent financial data to see if the opportunity still exists. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Is Life Time Group Holdings Still Cheap? Life Time Group Holdings is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, we've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. We find that Life Time Group Holdings's ratio of 32.11x is above its peer average of 24.04x, which suggests the stock is trading at a higher price compared to the Hospitality industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Life Time Group Holdings's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market. Check out our latest analysis for Life Time Group Holdings What does the future of Life Time Group Holdings look like? Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Life Time Group Holdings' earnings over the next few years are expected to increase by 73%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value. What This Means For You Are you a shareholder? LTH's optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe LTH should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed. Are you a potential investor? If you've been keeping tabs on LTH for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for LTH, which means it's worth diving deeper into other factors in order to take advantage of the next price drop. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 2 warning signs for Life Time Group Holdings you should know about. If you are no longer interested in Life Time Group Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
