Naseej for Technology (TADAWUL:9538) Has More To Do To Multiply In Value Going Forward

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. However, after investigating Naseej for Technology (TADAWUL:9538), we don't think it's current trends fit the mold of a multi-bagger.

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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. Analysts use this formula to calculate it for Naseej for Technology:

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

0.094 = ر.س15m ÷ (ر.س294m - ر.س137m) (Based on the trailing twelve months to June 2025).

So, Naseej for Technology has an ROCE of 9.4%. In absolute terms, that's a low return and it also under-performs the IT industry average of 26%.

View our latest analysis for Naseej for Technology

Historical performance is a great place to start when researching a stock so above you can see the gauge for Naseej for Technology's ROCE against it's prior returns. If you're interested in investigating Naseej for Technology's past further, check out this free graph covering Naseej for Technology's past earnings, revenue and cash flow.

How Are Returns Trending?

There are better returns on capital out there than what we're seeing at Naseej for Technology. The company has consistently earned 9.4% for the last five years, and the capital employed within the business has risen 73% in that time. Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital.

Another thing to note, Naseej for Technology has a high ratio of current liabilities to total assets of 47%. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.

In Conclusion...

Long story short, while Naseej for Technology has been reinvesting its capital, the returns that it's generating haven't increased. And investors appear hesitant that the trends will pick up because the stock has fallen 46% in the last three years. Therefore based on the analysis done in this article, we don't think Naseej for Technology has the makings of a multi-bagger.

Naseej for Technology does have some risks, we noticed 4 warning signs (and 1 which is a bit concerning) we think you should know about.

While Naseej for Technology may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.

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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.