STRATA Skin Sciences, Inc. (NASDAQ:SSKN) is a medical technology company specializing in the development and commercialization of products for the treatment of dermatological conditions. The company focuses on providing innovative solutions for skin diseases, leveraging its expertise in laser technology. STRATA competes with other companies in the healthcare sector, such as Sensus Healthcare, Inc. (SRTS), Soleno Therapeutics, Inc. (SLNO), SenesTech, Inc. (SNES), and Xcel Brands, Inc. (XELB).
In evaluating STRATA's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. STRATA's ROIC is -58.59%, while its WACC is 7.71%. This results in a ROIC to WACC ratio of -7.60, indicating that the company is not generating returns above its cost of capital. This is a concern for investors as it suggests inefficiencies in capital utilization.
Comparatively, Sensus Healthcare, Inc. (SRTS) has a ROIC of -4.47% and a WACC of 10.28%, leading to a ROIC to WACC ratio of -0.44. Despite being negative, SRTS's ratio is the highest among its peers, suggesting it is closer to breaking even in terms of capital efficiency. This positions SRTS as a relatively better performer in managing its capital compared to STRATA.
Other peers like Soleno Therapeutics, Inc. (SLNO) and SenesTech, Inc. (SNES) have ROIC to WACC ratios of -13.40 and -12.05, respectively. These figures highlight significant challenges in generating returns above their cost of capital. Xcel Brands, Inc. (XELB) also faces similar issues with a ROIC to WACC ratio of -8.94, indicating inefficiencies in capital management.
Overall, the analysis reveals that all companies, including STRATA, are struggling to generate returns above their cost of capital. However, Sensus Healthcare, Inc. stands out with the highest ROIC to WACC ratio, suggesting potential for improvement in capital efficiency compared to its peers.
