Establishment Labs Holdings Inc. (NASDAQ:ESTA) is a prominent player in the medical technology sector, specializing in the design, development, and manufacturing of advanced silicone breast implants. The company competes within the medical device industry, alongside other notable companies such as OrthoPediatrics Corp. (KIDS) and SI-BONE, Inc. (SIBN).
In assessing ESTA's financial performance, the Return on Invested Capital (ROIC) emerges as a pivotal metric. ESTA's ROIC stands at -12.48%, significantly trailing its Weighted Average Cost of Capital (WACC) of 9.01%. This discrepancy underscores that ESTA is not generating sufficient returns to cover its cost of capital, culminating in a negative ROIC to WACC ratio of -1.39.
Comparatively, OrthoPediatrics Corp. (KIDS) reports a ROIC of -6.27% and a WACC of 8.86%, leading to a ROIC to WACC ratio of -0.71. Although KIDS also faces challenges in covering its cost of capital, its performance modestly surpasses that of ESTA's. Similarly, SI-BONE, Inc. (SIBN) exhibits a ROIC of -10.42% and a WACC of 7.50%, aligning with ESTA's ROIC to WACC ratio of -1.39.
Crinetics Pharmaceuticals, Inc. (CRNX) presents a more dire situation with a ROIC of -49.33% against a WACC of 4.44%, resulting in a ROIC to WACC ratio of -11.10. This starkly contrasts with LivaNova PLC (LIVN), which boasts a positive ROIC of 10.90% and a WACC of 7.96%, achieving a favorable ROIC to WACC ratio of 1.37 and demonstrating efficient capital utilization.
