LICAUTIOUS

Return on Equity (ROE)

-2.5%

Higher than 30% of Consumer Cyclical sector peers

Updated 271h ago

Sector Performance

30th percentile

-2.5%

Sector Median

8.5%

Sector Avg

-18.9%

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Deep Analysis

Return on Equity (ROE) measures how much profit a company generates from shareholders' money; a -2.5% ROE means LI is currently losing money relative to its equity base.

This result falls well below the Consumer Cyclical sector median of 8.9%, placing LI in the 29th percentile among its peers. The year-over-year change is not available, but the quarter-over-quarter change shows a drop of 266.7% from the prior quarter’s 1.5% ROE. A negative ROE combined with a sharp quarterly decline signals that the company is not only unprofitable on equity but also deteriorating quickly, increasing investment risk. This pattern contradicts any near-term recovery story, as the losses are deepening rather than stabilizing. The CAUTIOUS verdict is directly supported: the metric’s poor level and worsening trend reinforce the need for caution.

Frequently Asked Questions

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

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.

How does LI's Return on Equity (ROE) compare to its sector?

LI's Return on Equity (ROE) of -2.5% compares to a Consumer Cyclical sector median of 8.5%, placing it in the 30th percentile.

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

The closest Consumer Cyclical peers by Return on Equity (ROE) include: PVH (3.3%), APTV (1.8%), DKNG (0.6%), HMC (-3.8%), CROX (-6.1%).

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.