Ubiquiti Inc. (NYSE:UI) is a technology company that specializes in providing networking products and solutions. It is known for its innovative approach to wireless communication and networking technology. Ubiquiti's product range includes wireless networking equipment, routers, and switches, catering to both consumer and enterprise markets. The company competes with other technology firms like Fair Isaac Corporation, Paylocity Holding Corporation, Monolithic Power Systems, EPAM Systems, and Insulet Corporation.
Ubiquiti Inc. showcases a remarkable Return on Invested Capital (ROIC) of 63.47%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 9.68%. This results in a ROIC to WACC ratio of 6.56, indicating that Ubiquiti is highly efficient in using its capital to generate returns. This efficiency is a key factor in assessing the company's financial health and investment potential.
In comparison, Fair Isaac Corporation (FICO) has a ROIC of 45.08% and a WACC of 10.39%, resulting in a ROIC to WACC ratio of 4.34. While FICO also demonstrates strong capital efficiency, it falls short of Ubiquiti's performance. This comparison highlights Ubiquiti's superior ability to generate returns on its invested capital relative to its cost.
Paylocity Holding Corporation (PCTY) presents a different scenario with a ROIC of 4.12% and a WACC of 8.80%, 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, contrasting sharply with Ubiquiti's robust performance. This disparity underscores the importance of evaluating ROIC and WACC when considering investment opportunities.
Monolithic Power Systems, Inc. (MPWR) and EPAM Systems, Inc. (EPAM) have ROIC to WACC ratios of 1.64 and 0.97, respectively. While both companies manage to generate returns above their cost of capital, they do not match Ubiquiti's efficiency. Insulet Corporation (PODD) has a ROIC to WACC ratio of 1.93, which is better than some peers but still lags behind Ubiquiti. This analysis positions Ubiquiti as a leader in capital efficiency among its peers.
