EAT) has a ROIC of 2.37% and a WACC of 11.93%, indicating inefficiencies in capital utilization.Vivid Seats Inc. (NASDAQEAT) is a prominent online ticket marketplace that connects fans with live events, offering a wide range of tickets for concerts, sports, and theater events. The company operates in a competitive landscape alongside other ticketing platforms and entertainment service providers. In evaluating Vivid Seats' financial performance, key metrics such as Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial.
Vivid Seats has a ROIC of 2.37% and a WACC of 11.93%, resulting in a ROIC to WACC ratio of 0.20. This indicates that the company is not generating returns that exceed its cost of capital, suggesting inefficiencies in capital utilization. In comparison, its peers show varying levels of efficiency in generating returns relative to their cost of capital.
Bowlero Corp. (BOWL) leads the peer group with a ROIC of 7.48% and a WACC of 5.60%, resulting in a ROIC to WACC ratio of 1.34. This indicates that Bowlero is generating returns well above its cost of capital, making it the most efficient in capital utilization among its peers. This efficiency highlights Bowlero's strong financial performance.
Sovos Brands, Inc. (SOVO) also performs relatively well with a ROIC of 5.10% and a WACC of 5.21%, resulting in a ROIC to WACC ratio of 0.98. This suggests that Sovos is nearly breaking even on its cost of capital, indicating a balanced approach to capital utilization. This performance is commendable in the context of its industry.
In contrast, Stagwell Inc. (STGW) and CareMax, Inc. (CMAX) have ROICs below their WACC, with CareMax showing a particularly negative performance. CareMax's ROIC of -89.56% and WACC of 9.82% result in a ROIC to WACC ratio of -9.12, indicating significant inefficiencies in generating returns on invested capital. This highlights the challenges faced by CareMax in capital management.
