Allpark Empreendimentos Participações e Serviços (BVMF:ALPK3) Is Looking To Continue Growing Its Returns On Capital

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Allpark Empreendimentos Participações e Serviços (BVMF:ALPK3) looks quite promising in regards to its trends of return on capital.

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Understanding Return On Capital Employed (ROCE)

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Allpark Empreendimentos Participações e Serviços, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.18 = R$315m ÷ (R$2.5b - R$683m) (Based on the trailing twelve months to March 2025).

Thus, Allpark Empreendimentos Participações e Serviços has an ROCE of 18%. In absolute terms, that's a satisfactory return, but compared to the Commercial Services industry average of 12% it's much better.

Check out our latest analysis for Allpark Empreendimentos Participações e Serviços

Above you can see how the current ROCE for Allpark Empreendimentos Participações e Serviços compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Allpark Empreendimentos Participações e Serviços .

What Can We Tell From Allpark Empreendimentos Participações e Serviços' ROCE Trend?

Allpark Empreendimentos Participações e Serviços' ROCE growth is quite impressive. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 81% over the last five years. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. The company is doing well in that sense, and it's worth investigating what the management team has planned for long term growth prospects.

The Key Takeaway

To bring it all together, Allpark Empreendimentos Participações e Serviços has done well to increase the returns it's generating from its capital employed. And since the stock has fallen 65% over the last five years, there might be an opportunity here. With that in mind, we believe the promising trends warrant this stock for further investigation.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for ALPK3 on our platform that is definitely worth checking out.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.