ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. GDS Holdings's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 4.48%.
As of today (2026-06-26), GDS Holdings's WACC % is 2.84%. GDS Holdings's ROC % is 0.00% (calculated using TTM income statement data).
GDS Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
GDS Holdings (MEX:GDSN) 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, GDS Holdings's WACC % is 2.84%. GDS Holdings's ROC % is 0.00% (calculated using TTM income statement data).
GDS Holdings 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.
GDS Holdings ROC % Related Terms
GDS Holdings ROC % Historical Data
* Premium members only.
The historical data trend for GDS Holdings'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.
GDS Holdings (MEX:GDSN) has a ROC % of 4.48% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on GDS Holdings and its competitors.
Is GDS Holdings' ROC % too high?
GDS Holdings' current ROC % is 4.48%. The Software industry median ROC % is 3.11. GDS Holdings' value of 4.48% is 44.3% above this industry median. Overall, GDS Holdings has a GF Score™ of 69/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does GDS Holdings' ROC % compare to INGM and PSN?
GDS Holdings' ROC % of 4.48% can be compared against companies in the Software industry. The industry median ROC % is 3.11. GDS Holdings' value of 4.48% is 44.3% 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 Software company?
The median ROC % among Software companies is 3.11, based on 2,830 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. GDS Holdings's current ROC % of 4.48% is 44.3% 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 GDS Holdings and its competitors. For the Software industry, the median ROC % is 3.11 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. GDS Holdings's current ROC % is 4.48%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is GDS Holdings stock overvalued right now?
Based on GuruFocus' analysis, GDS Holdings (MEX:GDSN) is currently considered Significantly Overvalued. The stock's GF Value™ is MXN449.22, compared to a current price of MXN618.00 — trading 37.6% above its estimated fair value. The current ROC % is 4.48% and 44.3% above the Software industry median of 3.11. GDS Holdings' overall GF Score™ is 69/100 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 GDS Holdings (MEX:GDSN), the current ROC % is 4.48% 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 GDS Holdings (MEX:GDSN) Overvalued in 2026?
Based on GuruFocus' analysis, GDS Holdings stock appears to be overvalued.
The current stock price of MXN618.00 is trading 37.6% above its estimated GF Value™ of MXN449.22.
GuruFocus considers GDS Holdings to be Significantly Overvalued.
Key valuation signals for MEX:GDSN:
ROC %: 4.48%
GF Value™: MXN449.22 vs. price of MXN618.00 (37.6% above fair value)
Industry Position: 44.3% above the Software median
No single metric tells the full story. See the MEX:GDSN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
GDS Holdings started as an IT service provider in 2001, then moved to the data center business with its first self-developed data center opening in 2010. The company now develops and operates data centers in China and also builds, operates, and transfers data centers for other clients. It offers colocation and managed services and mainly targets hyperscale cloud service customers who take large areas of its data centers or even whole data centers under long-term contracts. Its data centers are located predominantly in and around the Tier 1 cities in China, and it has also started expanding into Southeast Asia via the now 23% owned DayOne. GDS listed on the Nasdaq in 2016 and completed a secondary listing in Hong Kong in 2020.
69GF Score
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