Aptar – revenue and profit growth does not mean better performance

Aptar (NYSE: ATR) creates dosing, dispensing and packaging products for the global beauty and phara sectors. Over the past 10 years, its revenue grew at revenue grew at 3.7% CAGR while PAT grew at 5.2% CAGR.

You would think that with top line and bottom line growth, this would be a good performance. However, it ROE its 2023 was about the same as that in 2012. This standstill return was because there was declining operating and capital efficiency.

As an investor, your focus is on profitability. The market is not going to re-rate the company is the growth is because it is using disproportionately more assets and capital to grow revenue and earnings.