FMP

FMP

Sequans Communications S.A. (NYSE:SQNS) Capital Efficiency Analysis

  • Sequans Communications S.A. (NYSE:SQNS) showcases a ROIC of 35.26% significantly outperforming its WACC of 10.29%.
  • Comparative analysis reveals Akoustis Technologies, Inc. with an unprecedented ROIC of 582.27%, leading in capital efficiency among peers.
  • Several competitors, including GoHealth, Inc. and KORU Medical Systems, Inc., display negative ROIC to WACC ratios, indicating inefficiencies in capital utilization.

Sequans Communications S.A. (NYSE:SQNS) is a company that specializes in providing 4G and 5G chips and modules for broadband, critical, and massive IoT applications. The company operates in a competitive market alongside peers like GoHealth, Inc., KORU Medical Systems, Inc., Akoustis Technologies, Inc., NexTech AR Solutions Corp., and Lantronix, Inc.

In evaluating Sequans, the Return on Invested Capital (ROIC) is a key metric. Sequans boasts a ROIC of 35.26%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 10.29%. This results in a ROIC to WACC ratio of 3.43, indicating that Sequans is effectively using its capital to generate returns well above its cost.

Comparatively, GoHealth, Inc. has a negative ROIC of -8.50% against a WACC of 10.65%, resulting in a ROIC to WACC ratio of -0.80. This suggests that GoHealth is not generating sufficient returns to cover its cost of capital. Similarly, KORU Medical Systems, Inc. shows a ROIC of -58.95% and a WACC of 6.18%, leading to a ROIC to WACC ratio of -9.54, indicating poor capital efficiency.

Akoustis Technologies, Inc. stands out with a remarkable ROIC of 582.27% and a WACC of 5.57%, resulting in a ROIC to WACC ratio of 104.59. This suggests that Akoustis is generating returns far exceeding its cost of capital, making it the leader among its peers in terms of capital efficiency. Meanwhile, NexTech AR Solutions Corp. and Lantronix, Inc. also show negative ROIC to WACC ratios, indicating challenges in capital utilization.