ATI (NYSE:ATI) has had a great run on the share market with its stock up by a significant 79% over the last three months. Since the market usually pay for a company’s long-term fundamentals, we decided to study the company’s key performance indicators to see if they could be influencing the market. Particularly, we will be paying attention to ATI’s ROE today.

Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.

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How Do You 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 ATI is:

21% = US$415m ÷ US$2.0b (Based on the trailing twelve months to March 2025).

The ‘return’ is the amount earned after tax over the last twelve months. That means that for every $1 worth of shareholders’ equity, the company generated $0.21 in profit.

See our latest analysis for ATI

What Is The Relationship Between ROE And Earnings Growth?

We have already established that ROE serves as an efficient profit-generating gauge for a company’s future earnings. Based on how much of its profits the company chooses to reinvest or “retain”, we are then able to evaluate a company’s future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don’t necessarily bear these characteristics.

ATI’s Earnings Growth And 21% ROE

To start with, ATI’s ROE looks acceptable. On comparing with the average industry ROE of 11% the company’s ROE looks pretty remarkable. Probably as a result of this, ATI was able to see an impressive net income growth of 57% over the last five years. We reckon that there could also be other factors at play here. Such as – high earnings retention or an efficient management in place.

We then compared ATI’s net income growth with the industry and we’re pleased to see that the company’s growth figure is higher when compared with the industry which has a growth rate of 14% in the same 5-year period.

NYSE:ATI Past Earnings Growth July 26th 2025

Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock’s future looks promising or ominous. What is ATI worth today? The intrinsic value infographic in our free research report helps visualize whether ATI is currently mispriced by the market.