Assessing Capital Efficiency: A Comparative Analysis of ROIC to WACC Ratios

• The Marygold Companies, Inc. (NYSE:MGLD) has a ROIC of -23.75% and a WACC of 5.51%, resulting in a ROIC to WACC ratio of -4.31, indicating inefficiency in capital utilization.
• Direct Digital Holdings, Inc. (DRCT) and NeuroSense Therapeutics Ltd. (NRSN) show even greater inefficiencies with ROIC to WACC ratios of -9.38 and -30.63, respectively.
• Hour Loop, Inc. (HOUR) demonstrates the highest capital efficiency among the peers with a ROIC of 3.62% and a WACC of 9.53%, leading to a ROIC to WACC ratio of 0.38.

The Marygold Companies, Inc. (NYSE:MGLD) operates across various sectors, offering a diverse range of services and products. A critical analysis of its financial performance involves comparing its Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC). This comparison is essential for understanding how effectively the company utilizes its capital to generate returns.

For MGLD, the ROIC is -23.75%, while the WACC is 5.51%. This leads to a ROIC to WACC ratio of -4.31, suggesting that the company is not generating sufficient returns on its invested capital relative to its cost of capital. This negative ratio indicates inefficiency in capital utilization, which could raise concerns for investors.

In comparison, Direct Digital Holdings, Inc. (DRCT) has a ROIC of -115.00% and a WACC of 12.26%, resulting in a ROIC to WACC ratio of -9.38. This is even less favorable than MGLD, indicating a greater inefficiency in capital use. Similarly, NeuroSense Therapeutics Ltd. (NRSN) shows a ROIC of -371.24% against a WACC of 12.12%, resulting in a ROIC to WACC ratio of -30.63, highlighting significant capital inefficiency.

On the other hand, Kidpik Corp. (PIK) and AgriFORCE Growing Systems Ltd. (AGRI) have ROIC to WACC ratios of -0.01 and 0.14, respectively. While PIK's ratio is slightly negative, AGRI's positive ratio suggests a better balance between returns and capital costs, though its WACC is notably high at 156.06%.

Hour Loop, Inc. (HOUR) stands out with a ROIC of 3.62% and a WACC of 9.53%, resulting in the highest ROIC to WACC ratio of 0.38 among the peers. This indicates that HOUR is effectively generating returns on its invested capital relative to its cost, suggesting better capital efficiency and potential for growth compared to MGLD and its other peers.