ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Terna SpA's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 4.98%.
As of today (2026-06-26), Terna SpA's WACC % is 3.69%. Terna SpA's ROC % is 8.56% (calculated using TTM income statement data).
Terna SpA 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.
Terna SpA (MIL:TRN) 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, Terna SpA's WACC % is 3.69%. Terna SpA's ROC % is 8.56% (calculated using TTM income statement data).
Terna SpA 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.
Terna SpA ROC % Related Terms
Terna SpA ROC % Historical Data
* Premium members only.
The historical data trend for Terna SpA'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.
Terna SpA (MIL:TRN) has a ROC % of 4.98% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Terna SpA and its competitors.
Is Terna SpA's ROC % too high?
Terna SpA's current ROC % is 4.98%. The Utilities - Regulated industry median ROC % is 4.18. Terna SpA's value of 4.98% is 19.1% above this industry median. Overall, Terna SpA has a GF Score™ of 84/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Terna SpA's ROC % compare to NEE and SO?
Terna SpA's ROC % of 4.98% can be compared against companies in the Utilities - Regulated industry. The industry median ROC % is 4.18. Terna SpA's value of 4.98% is 19.1% 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 an Utilities - Regulated company?
The median ROC % among Utilities - Regulated companies is 4.18, based on 501 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. Terna SpA's current ROC % of 4.98% is 19.1% 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 Terna SpA and its competitors. For the Utilities - Regulated industry, the median ROC % is 4.18 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Terna SpA's current ROC % is 4.98%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Terna SpA stock overvalued right now?
Based on GuruFocus' analysis, Terna SpA (MIL:TRN) is currently considered Fairly Valued. The stock's GF Value™ is €9.85, compared to a current price of €10.22 — trading 3.8% above its estimated fair value. The current ROC % is 4.98% and 19.1% above the Utilities - Regulated industry median of 4.18. Terna SpA's overall GF Score™ is 84/100 with 3 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 Terna SpA (MIL:TRN), the current ROC % is 4.98% 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 Terna SpA (MIL:TRN) Overvalued in 2026?
Based on GuruFocus' analysis, Terna SpA stock appears to be overvalued.
The current stock price of €10.22 is trading 3.8% above its estimated GF Value™ of €9.85.
GuruFocus considers Terna SpA to be Fairly Valued.
Key valuation signals for MIL:TRN:
ROC %: 4.98%
GF Value™: €9.85 vs. price of €10.22 (3.8% above fair value)
Industry Position: 19.1% above the Utilities - Regulated median
No single metric tells the full story. See the MIL:TRN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Terna SpA is an electricity transmission system operator that owns virtually all of the Italian National Transmission Grid. With a monopoly under an Italian government license, Terna transmits and dispatches electricity throughout the country. It is also responsible for the planning, construction, and maintenance of the nation's electrical grid. Terna segments its operations into its Regulated Activities, Non-Regulated Activities, and International Activities. The company generates the vast majority of its revenue from charging transmission fees as a part of its Regulated Activities. Under its Non-Regulated Activities, Terna mainly produces and sells electricity transformers. The company has also made efforts to expand its operations into Italy's neighboring countries and North Africa.
84GF Score
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