Ubiquiti Inc. (NYSE:UI) is a company that specializes in providing networking technology and solutions. It is known for its innovative products in wireless data communication and has a strong presence in the global market. Ubiquiti competes with companies like Fair Isaac Corporation, Paylocity Holding Corporation, Monolithic Power Systems, EPAM Systems, and Insulet Corporation, which operate in various technology and service sectors.
Ubiquiti's Return on Invested Capital (ROIC) is an impressive 63.47%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 9.61%. This results in a ROIC to WACC ratio of 6.61, indicating that Ubiquiti is highly efficient in generating returns on its investments. This efficiency is a key factor in its competitive advantage.
In comparison, Fair Isaac Corporation (FICO) has a ROIC of 45.08% and a WACC of 10.47%, resulting in a ROIC to WACC ratio of 4.30. While FICO also generates returns above its cost of capital, it does not match Ubiquiti's efficiency. This suggests that Ubiquiti is better at utilizing its capital to generate higher returns.
Paylocity Holding Corporation (PCTY) shows a ROIC of 4.12% against a WACC of 8.73%, leading to a ROIC to WACC ratio of 0.47. This indicates that Paylocity is not generating sufficient returns to cover its cost of capital, highlighting a less effective use of its investments compared to Ubiquiti.
Monolithic Power Systems, Inc. (MPWR) and Insulet Corporation (PODD) have ROIC to WACC ratios of 1.75 and 1.70, respectively. Although they generate returns above their cost of capital, their efficiency is still lower than Ubiquiti's. EPAM Systems, Inc. (EPAM) has a ROIC to WACC ratio of 0.93, indicating it barely covers its cost of capital. Ubiquiti's superior ratio underscores its effective capital utilization.
