ESSCAUTIOUS

Return on Equity (ROE)

10.6%

Updated 440h ago

Sector Performance

40th percentile

ESS

10.6%

Sector Median

13.8%

Sector Avg

31.4%

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Deep Analysis

Return on Equity (ROE) measures how much profit a company generates for each dollar of shareholders' equity; ESS's current 10.6% means it earns $0.106 for every $1 of equity.

This sits below the sector median of 14.3%, placing the company in the 38th percentile among its peers. The year-over-year change is not available, but the quarter-over-quarter change shows a decline of 12.4%, dropping from 12.1% to 10.6%. A below-median ROE combined with a recent downward move signals that the company's profitability relative to its equity base is weakening, which may raise risk for investors expecting steady returns. This metric supports the overall NEUTRAL verdict because the subpar level and recent deterioration do not warrant an outright bullish or bearish stance—they highlight a need for caution rather than confidence.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about ESS?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

Who are ESS's closest peers by Return on Equity (ROE)?

The closest peers by Return on Equity (ROE) include: MRNA (-36.6%), FICO (-37.3%), XRAY (-37.7%), VRSN (-38.3%), MSCI (-45.3%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.