The Returns At Sýn hf (ICE:SYN) Aren't Growing

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Sýn hf (ICE:SYN) has the makings of a multi-bagger going forward, but let's have a look at why that may be.

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Return On Capital Employed (ROCE): What Is It?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Sýn hf, this is the formula:

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

0.014 = Kr323m ÷ (Kr31b - Kr6.9b) (Based on the trailing twelve months to March 2025).

Thus, Sýn hf has an ROCE of 1.4%. Ultimately, that's a low return and it under-performs the Telecom industry average of 11%.

View our latest analysis for Sýn hf

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Sýn hf has performed in the past in other metrics, you can view this free graph of Sýn hf's past earnings, revenue and cash flow.

So How Is Sýn hf's ROCE Trending?

Things have been pretty stable at Sýn hf, with its capital employed and returns on that capital staying somewhat the same for the last five years. Businesses with these traits tend to be mature and steady operations because they're past the growth phase. With that in mind, unless investment picks up again in the future, we wouldn't expect Sýn hf to be a multi-bagger going forward.

The Key Takeaway

In a nutshell, Sýn hf has been trudging along with the same returns from the same amount of capital over the last five years. Unsurprisingly, the stock has only gained 18% over the last five years, which potentially indicates that investors are accounting for this going forward. So if you're looking for a multi-bagger, the underlying trends indicate you may have better chances elsewhere.

Sýn hf does have some risks, we noticed 3 warning signs (and 2 which can't be ignored) we think you should know about.

While Sýn hf isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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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.