Aytu BioPharma, Inc. (NASDAQ:AYTU) is a specialty pharmaceutical company focused on commercializing novel therapeutics. The company operates in a competitive landscape with peers like Co-Diagnostics, Inc., AIM ImmunoTech Inc., iBio, Inc., Biocept, Inc., and OpGen, Inc. These companies are also involved in the biotechnology and pharmaceutical sectors, each striving to innovate and capture market share.
Aytu BioPharma's Return on Invested Capital (ROIC) is -18.15%, while its Weighted Average Cost of Capital (WACC) is 23.23%. This results in a ROIC to WACC ratio of -0.78, indicating that the company is not generating enough returns to cover its cost of capital. This is a red flag for investors, as it suggests inefficiency in using its capital to generate profits.
In comparison, Co-Diagnostics, Inc. has a ROIC of -69.90% and a WACC of 9.04%, leading to a ROIC to WACC ratio of -7.73. Although still negative, Co-Diagnostics has the least negative ratio among its peers, suggesting it is closer to covering its cost of capital. This could imply a relatively better potential for financial improvement.
AIM ImmunoTech Inc. shows a ROIC of -451.42% against a WACC of 5.76%, resulting in a ROIC to WACC ratio of -78.36. This significant negative ratio highlights the company's struggle to generate returns, making it less attractive to investors compared to its peers. Similarly, iBio, Inc. and Biocept, Inc. also exhibit negative ROIC to WACC ratios of -9.95 and -26.61, respectively, indicating challenges in covering their capital costs.
OpGen, Inc. presents a ROIC of -408.66% and a WACC of 13.54%, leading to a ROIC to WACC ratio of -30.18. This further emphasizes the difficulties faced by these companies in generating sufficient returns. Investors should carefully consider these financial metrics, as they reflect the companies' current inefficiencies in capital utilization.
