ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Telstra Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 5.10%.
As of today (2026-06-24), Telstra Group's WACC % is 5.72%. Telstra Group's ROC % is 5.35% (calculated using TTM income statement data).
Telstra Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Telstra Group (FRA:5KB) 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, Telstra Group's WACC % is 5.72%. Telstra Group's ROC % is 5.35% (calculated using TTM income statement data).
Telstra Group 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.
Telstra Group ROC % Related Terms
Telstra Group ROC % Historical Data
* Premium members only.
The historical data trend for Telstra Group'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 (Dec. 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.
Telstra Group (FRA:5KB) has a ROC % of 5.10% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Telstra Group and its competitors.
Is Telstra Group's ROC % too high?
Telstra Group's current ROC % is 5.10%. The Telecommunication Services industry median ROC % is 4.54. Telstra Group's value of 5.10% is 12.3% above this industry median. Overall, Telstra Group has a GF Score™ of 80/100, reflecting its overall financial health beyond just this single metric.
How does Telstra Group's ROC % compare to TMUS and VZ?
Telstra Group's ROC % of 5.10% can be compared against companies in the Telecommunication Services industry. The industry median ROC % is 4.54. Telstra Group's value of 5.10% is 12.3% 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 Telecommunication Services company?
The median ROC % among Telecommunication Services companies is 4.54, based on 366 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. Telstra Group's current ROC % of 5.10% is 12.3% 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 Telstra Group and its competitors. For the Telecommunication Services industry, the median ROC % is 4.54 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Telstra Group's current ROC % is 5.10%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Telstra Group stock overvalued right now?
Telstra Group (FRA:5KB) has a current ROC % of 5.10%. The stock's GF Value™ is €13.10, compared to a current price of €15.10 — trading 15.3% above its estimated fair value. The current ROC % is 5.10% and 12.3% above the Telecommunication Services industry median of 4.54. Telstra Group's overall GF Score™ is 80/100 with 6 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 Telstra Group (FRA:5KB), the current ROC % is 5.10% 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 Telstra Group (FRA:5KB) Overvalued in 2026?
Based on GuruFocus' analysis, Telstra Group stock appears to be overvalued.
The current stock price of €15.10 is trading 15.3% above its estimated GF Value™ of €13.10.
Key valuation signals for FRA:5KB:
ROC %: 5.10%
GF Value™: €13.10 vs. price of €15.10 (15.3% above fair value)
Industry Position: 12.3% above the Telecommunication Services median
No single metric tells the full story. See the FRA:5KB stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Telstra is Australia's largest telecommunications company, with dominant market shares in voice, mobile, enterprise telecom, and fixed-line broadband resale via the national broadband network. Telstra provides most of its services via its infrastructure assets, such as a fixed-line network (data centers, exchanges, poles, ducts, pits and pipes, fiber network), a mobile network, and mobile towers. Its customers span retail, corporate, government, wholesale, and overseas segments. Telstra also provides the government-owned, last-mile fixed-line National Broadband Network with long-term access to its infrastructure, in return for recurring payments. Finally, Telstra operates a leading telecom operation in Papua New Guinea and the surrounding South-Pacific countries.
80GF Score
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