Does Vector Limited's (NZSE:VCT) Weak Fundamentals Mean That The Stock Could Move In The Opposite Direction?

Simply Wall St.

Nov 26

Vector's (NZSE:VCT) stock is up by 6.9% over the past three months. However, its weak financial performance indicators makes us a bit doubtful if that trend could continue. Specifically, we ...

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However, its weak financial performance indicators makes us a bit doubtful if that trend could continue.      Specifically, we ...</p>\n\n<a href=\"https://simplywall.st/stocks/nz/utilities/nzx-vct/vector-shares/news/does-vector-limiteds-nzsevct-weak-fundamentals-mean-that-the\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Does Vector Limited's (NZSE:VCT) Weak Fundamentals Mean That The Stock Could Move In The Opposite Direction?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDoes Vector Limited's (NZSE:VCT) Weak Fundamentals Mean That The Stock Could Move In The Opposite Direction?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-11-26 03:58 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/nz/utilities/nzx-vct/vector-shares/news/does-vector-limiteds-nzsevct-weak-fundamentals-mean-that-the><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Vector's (NZSE:VCT) stock is up by 6.9% over the past three months.   However, its weak financial performance indicators makes us a bit doubtful if that trend could continue.      Specifically, we ...</p>\n\n<a href=\"https://simplywall.st/stocks/nz/utilities/nzx-vct/vector-shares/news/does-vector-limiteds-nzsevct-weak-fundamentals-mean-that-the\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"VCT.NZ","symbol_name":"Vector Limited (NS) Ordinary Shares","start_time":0,"source_url":"https://simplywall.st/stocks/nz/utilities/nzx-vct/vector-shares/news/does-vector-limiteds-nzsevct-weak-fundamentals-mean-that-the","article_id":"2586406959","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/9541000-choice1-main-header/1585186737623"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/nz/utilities/nzx-vct/vector-shares/news/does-vector-limiteds-nzsevct-weak-fundamentals-mean-that-the","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2586406959","pubTimestamp":1764100699,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Vector's (NZSE:VCT) stock is up by 6.9% over the past three months. However, its weak financial performance indicators...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"VCT.NZ":"Vector Limited (NS) Ordinary Shares","BK4561":"索罗斯持仓","VAQC":"Vector Acquisition Corporation II","BK8063":"复合型公用事业"},"translate_title":"Vector Limited(NZSE：VCT)疲软的基本面是否意味着该股可能会朝相反的方向走势？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VCT.NZ":1.5,"VAQC":1.5},"content_text":"Vector's (NZSE:VCT) stock is up by 6.9% over the past three months.   However, its weak financial performance indicators makes us a bit doubtful if that trend could continue.      Specifically, we decided to study Vector's  ROE in this article.    Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital.  Put another way, it reveals the company's success at turning shareholder investments into profits. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.Advertisement How To Calculate Return On Equity?  The formula for ROE is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Vector is:4.3% = NZ$155m ÷ NZ$3.6b (Based on the trailing twelve months to June 2025). The 'return' is the amount earned after tax over the last twelve months.  Another way to think of that is that for every NZ$1 worth of equity, the company was able to earn NZ$0.04 in profit.  View our latest analysis for Vector   What Has ROE Got To Do With Earnings Growth?  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.  A Side By Side comparison of Vector's Earnings Growth And 4.3% ROE  As you can see, Vector's ROE looks pretty weak.   Not just that, even compared to the industry average of 9.0%, the company's ROE is entirely unremarkable.   Given the circumstances, the significant decline in net income by 2.4% seen by Vector over the last five years is not surprising.  However, there could also be other factors causing the earnings to decline.  For example, the business has allocated capital poorly, or that the company has a very high payout ratio.     However, when we compared Vector's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 7.8% in the same period. This is quite worrisome.   NZSE:VCT Past Earnings Growth November 25th 2025 Earnings growth is an important metric to consider when valuing a stock.   The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in.  By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await.    Has the market priced in the future outlook for VCT? You can find out in our latest intrinsic value infographic research report.   Is Vector Efficiently Re-investing Its Profits?   Vector's high three-year median payout ratio of 188% suggests that the company is depleting its resources to keep up its dividend payments, and this shows in its shrinking earnings.    Its usually very hard to sustain dividend payments that are higher than reported profits.      You can see the 2 risks we have identified for Vector by visiting our risks dashboard for free  on our platform here.   Moreover, Vector has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth.      Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 109% over the next three years.   The fact that the company's ROE is expected to rise to 7.6% over the same period is explained by the drop in the payout ratio.      Summary    In total, we would have a hard think before deciding on any investment action concerning Vector.      The low ROE, combined with the fact that the company is paying out almost if not all, of its profits as dividends, has resulted in the lack or absence of growth in its earnings.       With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future.     Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}