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Volvo ABVOLAF -1.64%90 Forward Rate of Return (Yacktman) % is 7.37% as of Jun. 2026, which is 42% below its 10-year median of 12.74. GuruFocus rates VOLAF with a GF Score™ of 90/100 and a GF Value™ of $25.32 (Significantly Overvalued). The stock has 9 warning signs investors should review. Among 170 Farm & Heavy Construction Machinery companies, Volvo AB ranks worse than 55.88% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Volvo AB's forward rate of return for was 7.37%.
The historical rank and industry rank for Volvo AB's Forward Rate of Return (Yacktman) % or its related term are showing as below:
VOLAF'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -5.88 Med: 12.74 Max: 24.64
Current: 7.22
During the past 13 years, Volvo AB's highest Forward Rate of Return was 24.64. The lowest was -5.88. And the median was 12.74.
VOLAF's Forward Rate of Return (Yacktman) % is ranked worse than 55.88% of 170
companies
in the Farm & Heavy Construction Machinery industry
Industry Median: 10.305
vs VOLAF: 7.22
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Volvo AB (OTCPK:VOLAF) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Volvo AB Forward Rate of Return (Yacktman) % Related Terms
Volvo AB Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for Volvo AB's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Volvo AB Forward Rate of Return (Yacktman) % Chart
VOLAF vs CAT, DE, PCAR: Forward Rate of Return (Yacktman) % Comparison
For the Farm & Heavy Construction Machinery subindustry, Volvo AB's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Volvo AB Forward Rate of Return (Yacktman) % vs Farm & Heavy Construction Machinery Industry
For the Farm & Heavy Construction Machinery industry and Industrials sector, Volvo AB's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Volvo AB's Forward Rate of Return (Yacktman) % falls into.
Volvo AB Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 7.37% mean?
Volvo AB (VOLAF) has a Forward Rate of Return (Yacktman) % of 7.37% as of Jun. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Volvo AB and its competitors. This is 42% below median its historical median of 12.74. According to the industry distribution chart, Volvo AB ranks #95 out of 170 companies in the Farm & Heavy Construction Machinery industry, placing it in the top 55.9%.
Is Volvo AB's Forward Rate of Return (Yacktman) % too high?
Volvo AB's current Forward Rate of Return (Yacktman) % of 7.37% is 42% below median its 10-year median of 12.74. The Farm & Heavy Construction Machinery industry median Forward Rate of Return (Yacktman) % is 10.31. Volvo AB's value of 7.37% is 28.5% below this industry median. Based on the distribution chart, Volvo AB ranks #95 out of 170 companies in the Farm & Heavy Construction Machinery industry, which is below the industry midpoint. Overall, Volvo AB has a GF Score™ of 90/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Volvo AB's Forward Rate of Return (Yacktman) % compare to CAT and DE?
According to the Farm & Heavy Construction Machinery industry distribution chart, Volvo AB ranks #95 out of 170 companies for Forward Rate of Return (Yacktman) %. This places Volvo AB in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 10.31. Volvo AB's value of 7.37% is 28.5% below this benchmark. While the company's 10-year median is 12.74 vs. the industry median of 10.31, Volvo AB has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Farm & Heavy Construction Machinery company?
The median Forward Rate of Return (Yacktman) % among Farm & Heavy Construction Machinery companies is 10.31, based on 170 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Volvo AB's current Forward Rate of Return (Yacktman) % of 7.37% is 28.5% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Volvo AB and its competitors. For the Farm & Heavy Construction Machinery industry, the median Forward Rate of Return (Yacktman) % is 10.31 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Volvo AB's current Forward Rate of Return (Yacktman) % is 7.37%, which is 42% below median its own 10-year median of 12.74. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Volvo AB stock overvalued right now?
Based on GuruFocus' analysis, Volvo AB (VOLAF) is currently considered Significantly Overvalued. The stock's GF Value™ is $25.32, compared to a current price of $34.15 — trading 34.9% above its estimated fair value. The current Forward Rate of Return (Yacktman) % is 7.37%, which is 42% below median its 10-year median of 12.74 and 28.5% below the Farm & Heavy Construction Machinery industry median of 10.31. Volvo AB's overall GF Score™ is 90/100 with 9 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For Volvo AB (VOLAF), the current Forward Rate of Return (Yacktman) % is 7.37% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Volvo AB (VOLAF) Overvalued in 2026?
Based on GuruFocus' analysis, Volvo AB stock appears to be overvalued.
The current stock price of $34.15 is trading 34.9% above its estimated GF Value™ of $25.32.
GuruFocus considers Volvo AB to be Significantly Overvalued.
Key valuation signals for VOLAF:
Forward Rate of Return (Yacktman) %: 7.37% (42% below median its 10-year median of 12.74)
GF Value™: $25.32 vs. price of $34.15 (34.9% above fair value)
Industry Position: 28.5% below the Farm & Heavy Construction Machinery median (#95 of 170)
No single metric tells the full story. See the VOLAF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The Volvo Group is one of the largest global truck, bus, construction equipment, and engine and power system original equipment manufacturers, operating with the Volvo, Renault Truck, Mack Trucks, Volvo Penta, and Nova Bus brands. Among the four largest Western global brands—Volvo, Daimler, Paccar, and Traton—Volvo ranks third in terms of annual deliveries. Its truck, construction equipment, bus, and engines and power system segments contributed 71%, 18%, 5%, and 5%, respectively, to industrial operations' revenue in 2025. An in-house financial services division supports these businesses. In its key regions of Europe, North America, Brazil, and Australia, the truck business holds large market shares of 29%, 17%, 24%, and 22%, respectively.
90GF Score
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Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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