Inter & Co’s 1.42% ROIC trails 10.0% WACC, peers outperform
Inter & Co, Inc. reports a ROIC of 1.42% against a WACC of 10.00%, resulting in a ROIC-to-WACC ratio of 0.14 that indicates inefficient capital utilization. Peers such as Alvotech (0.47 ratio) and Commercial International Bank Egypt (1.25 ratio) outperform significantly in generating shareholder returns.
1. Inter & Co Capital Efficiency
Inter & Co, Inc. posted a 1.42% return on invested capital compared to a 10.00% weighted average cost of capital, generating a ROIC-to-WACC ratio of 0.14. This shortfall indicates that the company’s core operations are not producing returns sufficient to cover its cost of capital.
2. Peer Capital Utilization Comparison
Alvotech achieved a ROIC of 3.74% against a WACC of 7.98% (ratio 0.47) and Global Business Travel Group posted a 3.59% ROIC versus an 8.57% WACC (ratio 0.42), both outperforming Inter & Co. ProKidney Corp. showed a negative ROIC of -52.92% against a 12.14% WACC (ratio -4.36), while Commercial International Bank Egypt delivered a 28.66% ROIC on a 22.91% WACC (ratio 1.25), highlighting stark contrasts in capital efficiency.
3. Implications for Shareholder Value
Inter & Co’s inability to generate returns above its cost of capital may limit shareholder value, constrain reinvestment capacity, and pressure the company’s valuation multiples relative to more efficient peers.
4. Strategic Considerations
To enhance capital utilization, the company could consider tighter cost controls, reallocating capital to higher-yield segments, or divesting low-return assets to bolster overall returns on invested capital.