BAE SystemsBAESY +6.45%87 Return-on-Tangible-Equity is Negative Tangible Equity% as of Dec. 2025. GuruFocus rates BAESY with a GF Score™ of 87/100 and a GF Value™ of $91.65 (Modestly Overvalued). The stock has 2 warning signs investors should review. Among 334 Aerospace & Defense companies, BAE Systems ranks better than 99.7% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. BAE Systems's annualized net income for the quarter that ended in Dec. 2025 was $2,926 Mil. BAE Systems's average shareholder tangible equity for the quarter that ended in Dec. 2025 was $-5,274 Mil. Therefore, BAE Systems's annualized Return-on-Tangible-Equity for the quarter that ended in Dec. 2025 was Negative Tangible Equity%.
The historical rank and industry rank for BAE Systems's Return-on-Tangible-Equity or its related term are showing as below:
BAESY'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 0 Med: 0 Max: 0
Current: Negative Tangible Equity
BAESY's Return-on-Tangible-Equity is ranked better than 99.7% of 334
companies
in the Aerospace & Defense industry
Industry Median: 8.195
vs BAESY: Negative Tangible Equity
BAE Systems (OTCPK:BAESY) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
BAE Systems Return-on-Tangible-Equity Related Terms
BAE Systems Return-on-Tangible-Equity Historical Data
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The historical data trend for BAE Systems's Return-on-Tangible-Equity 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.
BAESY vs SPCX, GE, RTX: Return-on-Tangible-Equity Comparison
For the Aerospace & Defense subindustry, BAE Systems's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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.
BAE Systems Return-on-Tangible-Equity vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, BAE Systems's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where BAE Systems's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is two times the semi-annual (Dec. 2025) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of Negative Tangible Equity% mean?
BAE Systems (BAESY) has a Return-on-Tangible-Equity of Negative Tangible Equity% as of Dec. 2025. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on BAE Systems and its competitors. According to the industry distribution chart, BAE Systems ranks #1 out of 334 companies in the Aerospace & Defense industry, placing it in the top 0.3%.
Is BAE Systems' Return-on-Tangible-Equity too high?
BAE Systems' current Return-on-Tangible-Equity is Negative Tangible Equity%. Based on the distribution chart, BAE Systems ranks #1 out of 334 companies in the Aerospace & Defense industry, which is in the top quartile — a strong position relative to peers. Overall, BAE Systems has a GF Score™ of 87/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does BAE Systems' Return-on-Tangible-Equity compare to SPCX and GE?
According to the Aerospace & Defense industry distribution chart, BAE Systems ranks #1 out of 334 companies for Return-on-Tangible-Equity. This places BAE Systems in the top 0% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 8.20. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for an Aerospace & Defense company?
The median Return-on-Tangible-Equity among Aerospace & Defense companies is 8.20, based on 334 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on BAE Systems and its competitors. For the Aerospace & Defense industry, the median Return-on-Tangible-Equity is 8.20 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. BAE Systems's current Return-on-Tangible-Equity is Negative Tangible Equity%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is BAE Systems stock overvalued right now?
Based on GuruFocus' analysis, BAE Systems (BAESY) is currently considered Modestly Overvalued. The stock's GF Value™ is $91.65, compared to a current price of $106.11 — trading 15.8% above its estimated fair value. The current Return-on-Tangible-Equity is Negative Tangible Equity%. BAE Systems' overall GF Score™ is 87/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For BAE Systems (BAESY), the current Return-on-Tangible-Equity is Negative Tangible Equity% as of Dec. 2025. 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 BAE Systems (BAESY) Overvalued in 2026?
Based on GuruFocus' analysis, BAE Systems stock appears to be overvalued.
The current stock price of $106.11 is trading 15.8% above its estimated GF Value™ of $91.65.
GuruFocus considers BAE Systems to be Modestly Overvalued.
No single metric tells the full story. See the BAESY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the US Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's US- and UK-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the US government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the US Defense Department; the air segment includes BAE's share of US and European air programs as well as its businesses in Saudi Arabia and Australia, and the maritime segment comprises UK land- and marine-based activities.
87GF Score
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