WEBULL

NGS Group (NGM:NGS) Has Some Difficulty Using Its Capital Effectively

Simply Wall St · 2d ago

What financial metrics can indicate to us that a company is maturing or even in decline? A business that's potentially in decline often shows two trends, a return on capital employed (ROCE) that's declining, and a base of capital employed that's also declining. Basically the company is earning less on its investments and it is also reducing its total assets. So after we looked into NGS Group (NGM:NGS), the trends above didn't look too great.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

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

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on NGS Group is:

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

0.014 = kr1.4m ÷ (kr144m - kr44m) (Based on the trailing twelve months to September 2025).

Thus, NGS Group has an ROCE of 1.4%. In absolute terms, that's a low return and it also under-performs the Healthcare industry average of 8.9%.

Check out our latest analysis for NGS Group

roce
NGM:NGS Return on Capital Employed December 7th 2025

Historical performance is a great place to start when researching a stock so above you can see the gauge for NGS Group's ROCE against it's prior returns. If you'd like to look at how NGS Group has performed in the past in other metrics, you can view this free graph of NGS Group's past earnings, revenue and cash flow.

How Are Returns Trending?

The trend of returns that NGS Group is generating are raising some concerns. To be more specific, today's ROCE was 5.2% five years ago but has since fallen to 1.4%. What's equally concerning is that the amount of capital deployed in the business has shrunk by 57% over that same period. When you see both ROCE and capital employed diminishing, it can often be a sign of a mature and shrinking business that might be in structural decline. If these underlying trends continue, we wouldn't be too optimistic going forward.

The Bottom Line On NGS Group's ROCE

In short, lower returns and decreasing amounts capital employed in the business doesn't fill us with confidence. We expect this has contributed to the stock plummeting 79% during the last five years. Unless there is a shift to a more positive trajectory in these metrics, we would look elsewhere.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 4 warning signs for NGS Group (of which 3 are a bit concerning!) that you should know about.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.