The HIVE blockchain technologies Ltd.’s stock prices are grown by 177% in the last quarter. The blockchain-based firm experienced the highest growth in the last 3 months. Everyone is mesmerized by the sudden Uptrend in their stock values. Most importantly their financial trends need to be analyzed to understand the uptrend in HIVE blockchain stock prices.
Before we jump into the analysis, we need to understand the ROE, Return On Equity of the HIVE technologies. If you don’t know about ROE, it is an essential commodity for the stakeholders or the investors to know how their capital or the investment is being reinvested. In simple words, the ROE is the measure of a company’s success in returning the profits to stakeholder’s capital or investment.
The ROE (Return On Equity) calculation
The Return On Equity can be expressed as a positive percentage of the Firm’s net income and Equity. You can calculate the ROE of any firm using the below formula.
Where, the net income is the total net expense, income, and taxes that a particular company in a specific period. The average Stakeholder’s equity is the equity that should be added at the beginning of the specific period.
ROE is not only a parameter to understand the company’s stock price. But it also penlights the firm’s issues like excess debt, Volatile profits, and Negative net income. Well, now you know the formula to calculate the ROE right? Then without a wait, you can calculate the ROE.
The Return On Equity of the HIVE Blockchain Technologies Ltd, based on the above computations, which is based on the last 12 months company’s evaluations. You need to understand the ROE to know HIVE blockchain technologies stock price. Because ROE is the key to the stock prices in any firm.
The ROE and Earning’s growth – Invaluable relation
Till now, we have gone through the ROE, which potentially measures the firm’s growth and profits. It is also important to understand, how much profit the company is reinvesting for their future growth.
This will also determine the growth potential of the company. It is a known theory that firms who achieve high equity returns and more profit reinvestment will experience a high growth curve.
HIVE Blockchain technologies stock price
With all this information, now it’s clear that the HIVE has the best ROE. Even if you compare the ROE with industry, which has 23% ROE, the HIVE got an impressive record in terms of ROE. But despite having all these, their annual earnings growth get decreased by 40%.
You may wonder how a company with impressive ROE does not translate the earnings growth. Yes, the ROE will never misrepresent earnings growth. So there will be some reasons which are affecting the growth of the firm.
When you dig deeper, you will get to know that the company’s earning growth is shrinking in the last 5 years. But the thing is in this time frame the industry has witnessed 16% growth and it is the major thing to worry about.
The earning’s growth is the key metric that decides the stock price. So any investor should have good knowledge of the expected growth and the firm’s current growth as it will decide the stock price path. Kindly note that one thing that will indicate the stock price is the P/E ratio which decides the stock price based on the earnings growth.
HIVE is a blockchain-based tech company whose stock prices were seen being uptrend suddenly in the last quarter. One of the major contributors to this is their industry beating ROI of 43%. Thanks to their financial achievements in the last quarter.
The HIVE blockchain technologies stock price has increased by 177% and it’s under high volatility. The worrying thing is that the company is facing a 40% decline in earnings growth.
Anyway, this article takes you through the stock price of HIVE and its factors. Note that the ROE is important but the earnings growth is the KEY!!!
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