Janus International Group, Inc.’s (NYSE:JBI) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?

With its stock down 31% over the past three months, it is easy to disregard Janus International Group (NYSE:JBI). However, the company’s fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements. In this article, we decided to focus on Janus International Group’s ROE.

Return on equity or ROE is a key measure used to assess how efficiently a company’s management is utilizing the company’s capital. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company’s shareholders.

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The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity

So, based on the above formula, the ROE for Janus International Group is:

8.4% = US$47m ÷ US$561m (Based on the trailing twelve months to September 2025).

The ‘return’ is the profit over the last twelve months. So, this means that for every $1 of its shareholder’s investments, the company generates a profit of $0.08.

View our latest analysis for Janus International Group

So far, we’ve learned that ROE is a measure of a company’s profitability. We now need to evaluate how much profit the company reinvests or “retains” for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don’t have the same features.

On the face of it, Janus International Group’s ROE is not much to talk about. Next, when compared to the average industry ROE of 14%, the company’s ROE leaves us feeling even less enthusiastic. Janus International Group was still able to see a decent net income growth of 7.5% over the past five years. We reckon that there could be other factors at play here. For instance, the company has a low payout ratio or is being managed efficiently.

As a next step, we compared Janus International Group’s net income growth with the industry and were disappointed to see that the company’s growth is lower than the industry average growth of 14% in the same period.

Earnings growth is an important metric to consider when valuing a stock. It’s important for an investor to know whether the market has priced in the company’s expected earnings growth (or decline). Doing so will help them establish if the stock’s future looks promising or ominous. What is JBI worth today? The intrinsic value infographic in our free research report helps visualize whether JBI is currently mispriced by the market.

Given that Janus International Group doesn’t pay any regular dividends to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business.

Overall, we feel that Janus International Group certainly does have some positive factors to consider. Specifically, its fairly high earnings growth number, which no doubt was backed by the company’s high earnings retention. Still, the low ROE means that all that reinvestment is not reaping a lot of benefit to the investors. Having said that, looking at the current analyst estimates, we found that the company’s earnings are expected to gain momentum. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.

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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.