ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Deswell Industries's annualized return on capital (ROC %) for the quarter that ended in Sep. 2025 was 15.47%.
As of today (2026-06-24), Deswell Industries's WACC % is 11.56%. Deswell Industries's ROC % is 7.26% (calculated using TTM income statement data).
Deswell Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Deswell Industries (NAS:DSWL) ROC % Explanation
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, Deswell Industries's WACC % is 11.56%. Deswell Industries's ROC % is 7.26% (calculated using TTM income statement data).
Deswell Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.
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.
Deswell Industries ROC % Related Terms
Deswell Industries ROC % Historical Data
* Premium members only.
The historical data trend for Deswell Industries's ROC % 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.
Note:
The Operating Income data used here is two times the semi-annual (Sep. 2025) 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.
Deswell Industries (DSWL) has a ROC % of 15.47% as of Sep. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Deswell Industries and its competitors.
Is Deswell Industries' ROC % too high?
Deswell Industries' current ROC % is 15.47%. The Hardware industry median ROC % is 4.12. Deswell Industries' value of 15.47% is 275.9% above this industry median. Overall, Deswell Industries has a GF Score™ of 64/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Deswell Industries' ROC % compare to WBX and HOLO?
Deswell Industries' ROC % of 15.47% can be compared against companies in the Hardware industry. The industry median ROC % is 4.12. Deswell Industries' value of 15.47% is 275.9% 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 Hardware company?
The median ROC % among Hardware companies is 4.12, based on 2,444 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. Deswell Industries's current ROC % of 15.47% is 275.9% 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 Deswell Industries and its competitors. For the Hardware industry, the median ROC % is 4.12 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Deswell Industries's current ROC % is 15.47%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Deswell Industries stock overvalued right now?
Based on GuruFocus' analysis, Deswell Industries (DSWL) is currently considered Significantly Overvalued. The stock's GF Value™ is $2.17, compared to a current price of $3.88 — trading 78.8% above its estimated fair value. The current ROC % is 15.47% and 275.9% above the Hardware industry median of 4.12. Deswell Industries' overall GF Score™ is 64/100 with 5 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 Deswell Industries (DSWL), the current ROC % is 15.47% as of Sep. 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 Deswell Industries (DSWL) Overvalued in 2026?
Based on GuruFocus' analysis, Deswell Industries stock appears to be overvalued.
The current stock price of $3.88 is trading 78.8% above its estimated GF Value™ of $2.17.
GuruFocus considers Deswell Industries to be Significantly Overvalued.
Key valuation signals for DSWL:
ROC %: 15.47%
GF Value™: $2.17 vs. price of $3.88 (78.8% above fair value)
Industry Position: 275.9% above the Hardware median
No single metric tells the full story. See the DSWL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Deswell Industries Inc is engaged in the manufacturing and selling of injection-molded plastic parts and components. In addition, it also offers manufacturing services for electronic products and subassemblies and manufactures metallic molds and accessory parts for original equipment manufacturers and contract manufacturers. The company conducts all of its manufacturing activities at separate plastics, electronics and metallic operation factories located in the People's Republic of China. It operates through the Plastic Injection Molding and Electronic Products Assembling segments. The firm offers products such as automobile components, medical testing equipment, parts for audio equipment, av receivers, active subwoofers, digital system key sets, communication products and others.
64GF Score
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