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The Returns At Armac Locação Logística e Serviços (BVMF:ARML3) Aren't Growing

Simply Wall St · 2d ago

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. That's why when we briefly looked at Armac Locação Logística e Serviços' (BVMF:ARML3) ROCE trend, we were pretty happy with what we saw.

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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 Armac Locação Logística e Serviços, this is the formula:

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

0.10 = R$417m ÷ (R$4.6b - R$626m) (Based on the trailing twelve months to September 2025).

So, Armac Locação Logística e Serviços has an ROCE of 10%. In absolute terms, that's a pretty standard return but compared to the Trade Distributors industry average it falls behind.

Check out our latest analysis for Armac Locação Logística e Serviços

roce
BOVESPA:ARML3 Return on Capital Employed December 23rd 2025

Above you can see how the current ROCE for Armac Locação Logística 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, you can check out the forecasts from the analysts covering Armac Locação Logística e Serviços for free.

How Are Returns Trending?

The trend of ROCE doesn't stand out much, but returns on a whole are decent. The company has consistently earned 10% for the last five years, and the capital employed within the business has risen 1,358% in that time. 10% is a pretty standard return, and it provides some comfort knowing that Armac Locação Logística e Serviços has consistently earned this amount. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns.

The Bottom Line

The main thing to remember is that Armac Locação Logística e Serviços has proven its ability to continually reinvest at respectable rates of return. Yet over the last three years the stock has declined 60%, so the decline might provide an opening. For that reason, savvy investors might want to look further into this company in case it's a prime investment.

Armac Locação Logística e Serviços does come with some risks though, we found 4 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...

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.