ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Lamb Weston Holdings's annualized return on capital (ROC %) for the quarter that ended in Feb. 2026 was 6.81%.
As of today (2026-06-28), Lamb Weston Holdings's WACC % is 7.58%. Lamb Weston Holdings's ROC % is 7.71% (calculated using TTM income statement data).
Lamb Weston Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Lamb Weston Holdings's WACC % is 7.58%. Lamb Weston Holdings's ROC % is 7.71% (calculated using TTM income statement data).
Lamb Weston Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
* 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.
Note:
The Operating Income data used here is four times the quarterly (Feb. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Lamb Weston Holdings (BSP:L1WH34) has a ROC % of 6.81% as of Feb. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Lamb Weston Holdings and its competitors.
Is Lamb Weston Holdings' ROC % too high?
Lamb Weston Holdings' current ROC % is 6.81%. The Consumer Packaged Goods industry median ROC % is 5.14. Lamb Weston Holdings' value of 6.81% is 32.5% above this industry median. Overall, Lamb Weston Holdings has a GF Score™ of 77/100, reflecting its overall financial health beyond just this single metric.
How does Lamb Weston Holdings' ROC % compare to CPB and CAG?
Lamb Weston Holdings' ROC % of 6.81% can be compared against companies in the Consumer Packaged Goods industry. The industry median ROC % is 5.14. Lamb Weston Holdings' value of 6.81% is 32.5% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Consumer Packaged Goods company?
The median ROC % among Consumer Packaged Goods companies is 5.14, based on 1,948 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Lamb Weston Holdings's current ROC % of 6.81% is 32.5% above 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 ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Lamb Weston Holdings and its competitors. For the Consumer Packaged Goods industry, the median ROC % is 5.14 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Lamb Weston Holdings's current ROC % is 6.81%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Lamb Weston Holdings stock overvalued right now?
Lamb Weston Holdings (BSP:L1WH34) has a current ROC % of 6.81%. The stock's GF Value™ is R$180.59, compared to a current price of R$115.81 — trading 35.9% below its estimated fair value. The current ROC % is 6.81% and 32.5% above the Consumer Packaged Goods industry median of 5.14. Lamb Weston Holdings' overall GF Score™ is 77/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Lamb Weston Holdings (BSP:L1WH34), the current ROC % is 6.81% as of Feb. 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 Lamb Weston Holdings (BSP:L1WH34) Overvalued in 2026?
Based on GuruFocus' analysis, Lamb Weston Holdings stock appears to be undervalued.
The current stock price of R$115.81 is trading 35.9% below its estimated GF Value™ of R$180.59.
Key valuation signals for BSP:L1WH34:
ROC %: 6.81%
GF Value™: R$180.59 vs. price of R$115.81 (35.9% below fair value)
Industry Position: 32.5% above the Consumer Packaged Goods median
No single metric tells the full story. See the BSP:L1WH34 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Lamb Weston is North America's largest and the world's second-largest producer of branded and private-label frozen potato products, both by volume and value. The company's portfolio is anchored by french fries, but it also sells sweet potato fries, tater tots, diced potatoes, mashed potatoes, hash browns, and chips. Roughly two thirds of revenue comes from its home market of North America, with none of the other 100 countries the company sells into representing a significant share. McDonald's is Lamb Weston's single-largest customer at 15% of fiscal 2025 sales, with no other company representing more than 10%. Lamb Weston became an independent company in 2016 when it was spun off from Conagra.
77GF Score
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