Rafael Holdings, Inc. (NYSE:RFL) is a company involved in the development and commercialization of novel cancer therapies. It operates through its subsidiaries, focusing on the research and development of oncology drugs. The company is part of a competitive landscape that includes other biotech firms like Scholar Rock Holding Corporation, Evelo Biosciences, Inc., Verrica Pharmaceuticals Inc., and Replimune Group, Inc.
In evaluating RFL's financial performance, the Return on Invested Capital (ROIC) is a critical metric. RFL's ROIC stands at -34.90%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 7.93%. This results in a ROIC to WACC ratio of -4.40, indicating that the company is not generating returns above its cost of capital. However, compared to its peers, RFL's capital utilization is relatively more efficient.
Among its peers, Scholar Rock Holding Corporation (SRRK) has a ROIC of -101.98% and a WACC of 6.82%, leading to a ROIC to WACC ratio of -14.96. This suggests that SRRK is less efficient in utilizing its capital compared to RFL. Similarly, Evelo Biosciences, Inc. (EVLO) has a ROIC of -199.73% and a WACC of 9.04%, resulting in a ROIC to WACC ratio of -22.10, further highlighting its inefficiency.
Verrica Pharmaceuticals Inc. (VRCA) emerges as the most efficient among the peers, with a ROIC to WACC ratio of -4.13. Despite all companies having negative ratios, VRCA's is the least negative, indicating better capital efficiency. Replimune Group, Inc. (REPL) also shows a less favorable performance with a ROIC of -71.09% and a WACC of 7.47%, resulting in a ROIC to WACC ratio of -9.52.
