Global-e Online Ltd. (NASDAQ:GLBE) is a company that provides cross-border e-commerce solutions, helping retailers and brands expand their reach to international markets. Despite its innovative services, Global-e faces challenges in capital efficiency. The company's Return on Invested Capital (ROIC) is -7.03%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 10.18%. This negative ROIC indicates that Global-e is not generating enough returns to cover its cost of capital, which is a concern for investors.
In comparison, DLocal Limited (DLO) demonstrates a strong performance with a ROIC of 24.56% and a WACC of 10.58%. This results in a ROIC to WACC ratio of 2.32, indicating that DLocal is effectively using its capital to generate returns well above its cost. This efficiency in capital utilization positions DLocal as a leader among its peers in creating value for investors.
monday.com Ltd. (MNDY) also struggles with capital efficiency, showing a ROIC of -1.73% against a WACC of 10.36%. This results in a ROIC to WACC ratio of -0.17, suggesting that monday.com, like Global-e, is not generating sufficient returns to cover its cost of capital. This inefficiency can be a red flag for potential investors looking for value creation.
Confluent, Inc. (CFLT) and Marqeta, Inc. (MQ) face even greater challenges, with ROICs of -20.21% and -16.92%, respectively. Their ROIC to WACC ratios of -2.48 and -1.48 highlight significant inefficiencies in capital utilization. These figures suggest that both companies are far from covering their cost of capital, which could impact their long-term financial health.
DigitalOcean Holdings, Inc. (DOCN) presents a more balanced picture with a ROIC of 4.67% and a WACC of 10.14%. Although its ROIC to WACC ratio of 0.46 is positive, it still indicates that the company is not fully covering its cost of capital. However, it is closer to achieving efficient capital utilization compared to some of its peers.
