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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Richardson Electronics's annualized return on capital (ROC %) for the quarter that ended in May. 2026 was 7.79%.
As of today (2026-08-19), Richardson Electronics's WACC % is 14.17%. Richardson Electronics's ROC % is 3.56% (calculated using TTM income statement data).
Richardson Electronics earns returns that do not match up to its cost of capital. It will destroy value as it grows.
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, Richardson Electronics's WACC % is 14.17%. Richardson Electronics's ROC % is 3.56% (calculated using TTM income statement data).
Richardson Electronics 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.
* 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 (May. 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.
Richardson Electronics (FRA:RE3) has a ROC % of 7.79% as of May. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Richardson Electronics and its competitors.
Is Richardson Electronics' ROC % too high?
Richardson Electronics' current ROC % is 7.79%. The Hardware industry median ROC % is 4.31. Richardson Electronics' value of 7.79% is 80.7% above this industry median. Overall, Richardson Electronics has a GF Score™ of 62/100, reflecting its overall financial health beyond just this single metric.
How does Richardson Electronics' ROC % compare to OPTX and MPTI?
Richardson Electronics' ROC % of 7.79% can be compared against companies in the Hardware industry. The industry median ROC % is 4.31. Richardson Electronics' value of 7.79% is 80.7% 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 4.31, based on 2,442 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. Richardson Electronics's current ROC % of 7.79% is 80.7% 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 Richardson Electronics and its competitors. For the Hardware industry, the median ROC % is 4.31 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Richardson Electronics's current ROC % is 7.79%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Richardson Electronics stock overvalued right now?
Richardson Electronics (FRA:RE3) has a current ROC % of 7.79%. The stock's GF Value™ is €10.49, compared to a current price of €16.86 — trading 60.7% above its estimated fair value. The current ROC % is 7.79% and 80.7% above the Hardware industry median of 4.31. Richardson Electronics' overall GF Score™ is 62/100 with 9 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 Richardson Electronics (FRA:RE3), the current ROC % is 7.79% as of May. 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 Richardson Electronics (FRA:RE3) Overvalued in 2026?
Based on GuruFocus' analysis, Richardson Electronics stock appears to be overvalued.
The current stock price of €16.86 is trading 60.7% above its estimated GF Value™ of €10.49.
Key valuation signals for FRA:RE3:
ROC %: 7.79%
GF Value™: €10.49 vs. price of €16.86 (60.7% above fair value)
Industry Position: 80.7% above the Hardware median
No single metric tells the full story. See the FRA:RE3 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Richardson Electronics Ltd provides engineered solutions, power grid, and microwave tubes and related consumables, power conversion, RF and microwave components, high-value flat panel detector solutions, replacement parts, tubes, and service training for diagnostic imaging equipment and customized display solutions. The company's segment includes Power and Microwave Technologies, Green Energy Solutions, Canvys, and Healthcare. The company generates the majority of its revenue from the Power and Microwave Technologies segment, which includes the power grid and microwave tube business and RF, Wireless and Power technologies.
62GF Score
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