ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. H World Group's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 6.69%.
As of today (2026-06-25), H World Group's WACC % is 4.02%. H World Group's ROC % is 8.67% (calculated using TTM income statement data).
H World Group 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.
H World Group (FRA:CL4) 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, H World Group's WACC % is 4.02%. H World Group's ROC % is 8.67% (calculated using TTM income statement data).
H World Group 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.
H World Group ROC % Related Terms
H World Group ROC % Historical Data
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The historical data trend for H World 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 four times the quarterly (Mar. 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.
H World Group (FRA:CL4) has a ROC % of 6.69% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on H World Group and its competitors.
Is H World Group's ROC % too high?
H World Group's current ROC % is 6.69%. The Travel & Leisure industry median ROC % is 3.74. H World Group's value of 6.69% is 78.9% above this industry median. Overall, H World Group has a GF Score™ of 83/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does H World Group's ROC % compare to H and WH?
H World Group's ROC % of 6.69% can be compared against companies in the Travel & Leisure industry. The industry median ROC % is 3.74. H World Group's value of 6.69% is 78.9% 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 Travel & Leisure company?
The median ROC % among Travel & Leisure companies is 3.74, based on 833 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. H World Group's current ROC % of 6.69% is 78.9% 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 H World Group and its competitors. For the Travel & Leisure industry, the median ROC % is 3.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. H World Group's current ROC % is 6.69%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is H World Group stock overvalued right now?
Based on GuruFocus' analysis, H World Group (FRA:CL4) is currently considered Fairly Valued. The stock's GF Value™ is €3.92, compared to a current price of €3.62 — trading 7.7% below its estimated fair value. The current ROC % is 6.69% and 78.9% above the Travel & Leisure industry median of 3.74. H World Group's overall GF Score™ is 83/100 with 1 warning sign 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 H World Group (FRA:CL4), the current ROC % is 6.69% as of Mar. 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 H World Group (FRA:CL4) Overvalued in 2026?
Based on GuruFocus' analysis, H World Group stock appears to be undervalued.
The current stock price of €3.62 is trading 7.7% below its estimated GF Value™ of €3.92.
GuruFocus considers H World Group to be Fairly Valued.
Key valuation signals for FRA:CL4:
ROC %: 6.69%
GF Value™: €3.92 vs. price of €3.62 (7.7% below fair value)
Industry Position: 78.9% above the Travel & Leisure median
No single metric tells the full story. See the FRA:CL4 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
H World Group Ltd a foremost, fast-growing multi-brand hotel group with international operations. The principal business activities of the Company are to develop and operate leased and owned, manachised and franchised hotels mainly in the PRC or PRC Mainland. The Group has two operating segments which are legacy Huazhu and legacy DH according to the way management intends to evaluate results and allocate resources within the Group. The majority of revenue comes from legacy Huazhu. The company has presence in Greater China and also Outside Greater China.
83GF Score
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