Allocate SoftwareLSE:ALLA ROE % is 52.96% as of May. 2014, which is 623% above its 10-year median of 7.33. The stock has 1 warning sign investors should review.
The historical rank and industry rank for Allocate Software's ROE % or its related term are showing as below:
LSE:ALLA'
s ROE % Range Over the Past 10 Years
Min: -768.87 Med: 7.33 Max: 79.56
Current: 21.76
During the past 13 years, Allocate Software's highest ROE % was 79.56%. The lowest was -768.87%. And the median was 7.33%.
LSE:ALLA's ROE % is not ranked
in the Software industry.
Industry Median: 4.68
vs LSE:ALLA: 21.76
Allocate Software (LSE:ALLA) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is two times the semi-annual (May. 2014) net income data. The Revenue data used here is two times the semi-annual (May. 2014) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
Allocate Software ROE % Related Terms
Allocate Software ROE % Historical Data
* Premium members only.
The historical data trend for Allocate Software's ROE % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, Allocate Software's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Allocate Software ROE % vs Software Industry
For the Software industry and Technology sector, Allocate Software's ROE % distribution charts can be found below:
* The bar in red indicates where Allocate Software's ROE % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is two times the semi-annual (May. 2014) net income data.
ROE % is displayed in the 30-year financial page.
Allocate Software (LSE:ALLA) has a ROE % of 52.96% as of May. 2014. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Allocate Software and its competitors. This is 623% above median its historical median of 7.33.
Is Allocate Software's ROE % too high?
Allocate Software's current ROE % of 52.96% is 623% above median its 10-year median of 7.33. The Software industry median ROE % is 4.68. Allocate Software's value of 52.96% is 1031.6% above this industry median.
How does Allocate Software's ROE % compare to SREV and ASUR?
Allocate Software's ROE % of 52.96% can be compared against companies in the Software industry. The industry median ROE % is 4.68. Allocate Software's value of 52.96% is 1031.6% above this benchmark. While the company's 10-year median is 7.33 vs. the industry median of 4.68, Allocate Software has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROE % for a Software company?
The median ROE % among Software companies is 4.68, based on 2,679 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Allocate Software's current ROE % of 52.96% is 1031.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Allocate Software and its competitors. For the Software industry, the median ROE % is 4.68 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Allocate Software's current ROE % is 52.96%, which is 623% above median its own 10-year median of 7.33. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Allocate Software stock overvalued right now?
Allocate Software (LSE:ALLA) has a current ROE % of 52.96%. The current ROE % is 52.96%, which is 623% above median its 10-year median of 7.33 and 1031.6% above the Software industry median of 4.68. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For Allocate Software (LSE:ALLA), the current ROE % is 52.96% as of May. 2014. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Allocate Software PLC is engaged in the development, sale and support of workforce management solutions, and the provision of related IT services to major healthcare, defence, government and commercial customers. The business of the company is focused principally on the Healthcare market in addition to Defence. Its segments are Licence, Subscriptions, Support, and Services. Licence and Subscriptions segments represent the sale of non-cancellable software licence agreements and subscriptions associated with that software. Support and Services segments represent the provision of installation, consulting, training and product support. It operates in UK, Europe, USA and Australia.
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