FMP
May 23, 2025(Last modified: May 26, 2025)
MeridianLink, Inc. (NYSE:MLNK) is a company that provides software solutions for financial institutions. It offers a range of products that help banks and credit unions streamline their operations and improve customer service. In the competitive landscape, MeridianLink faces peers like PowerSchool Holdings, Inc. (PWSC), CS Disco, Inc. (LAW), EverCommerce Inc. (EVCM), Intapp, Inc. (INTA), and Paycor HCM, Inc. (PYCR).
In evaluating MeridianLink's financial efficiency, its Return on Invested Capital (ROIC) is 0.67%, while its Weighted Average Cost of Capital (WACC) is 8.12%. This results in a ROIC to WACC ratio of 0.0831, indicating that the company is not generating returns that exceed its cost of capital. This suggests that MeridianLink may not be using its capital as efficiently as it could be.
Comparatively, PowerSchool Holdings, Inc. (PWSC) shows a more favorable financial position with a ROIC of 1.93% and a WACC of 8.36%, leading to a ROIC to WACC ratio of 0.2307. This ratio is the highest among the peers, highlighting PowerSchool's efficiency in generating returns relative to its cost of capital. This makes PowerSchool an attractive option for investors seeking better capital efficiency.
CS Disco, Inc. (LAW) presents a stark contrast with a negative ROIC of -41.31% and a WACC of 13.54%, resulting in a ROIC to WACC ratio of -3.0516. This indicates significant inefficiency in generating returns, as the company's cost of capital far exceeds its returns. Similarly, Intapp, Inc. (INTA) and Paycor HCM, Inc. (PYCR) also show negative ROIC to WACC ratios, suggesting inefficiencies in their capital usage.
EverCommerce Inc. (EVCM) has a ROIC of 1.42% and a WACC of 8.56%, resulting in a ROIC to WACC ratio of 0.1664. While this is better than MeridianLink's ratio, it still indicates that the company is not generating returns that significantly exceed its cost of capital. Overall, PowerSchool Holdings stands out as the most efficient in capital usage among these companies.
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