ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Pure Cycle's annualized return on capital (ROC %) for the quarter that ended in Feb. 2026 was 0.51%.
As of today (2026-06-25), Pure Cycle's WACC % is 12.86%. Pure Cycle's ROC % is 6.39% (calculated using TTM income statement data).
Pure Cycle earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Pure Cycle (NAS:PCYO) 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, Pure Cycle's WACC % is 12.86%. Pure Cycle's ROC % is 6.39% (calculated using TTM income statement data).
Pure Cycle 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.
Pure Cycle ROC % Related Terms
Pure Cycle ROC % Historical Data
* Premium members only.
The historical data trend for Pure Cycle'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 (Feb. 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.
Pure Cycle (PCYO) has a ROC % of 0.51% as of Feb. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Pure Cycle and its competitors.
Is Pure Cycle's ROC % too high?
Pure Cycle's current ROC % is 0.51%. The Utilities - Regulated industry median ROC % is 4.18. Pure Cycle's value of 0.51% is 87.8% below this industry median. Overall, Pure Cycle has a GF Score™ of 72/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Pure Cycle's ROC % compare to GWRS and ARTNA?
Pure Cycle's ROC % of 0.51% can be compared against companies in the Utilities - Regulated industry. The industry median ROC % is 4.18. Pure Cycle's value of 0.51% is 87.8% below 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. Pure Cycle's current ROC % of 0.51% is 87.8% below 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 Pure Cycle 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. Pure Cycle's current ROC % is 0.51%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Pure Cycle stock overvalued right now?
Based on GuruFocus' analysis, Pure Cycle (PCYO) is currently considered Modestly Undervalued. The stock's GF Value™ is $14.11, compared to a current price of $11.37 — trading 19.4% below its estimated fair value. The current ROC % is 0.51% and 87.8% below the Utilities - Regulated industry median of 4.18. Pure Cycle's overall GF Score™ is 72/100 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 Pure Cycle (PCYO), the current ROC % is 0.51% as of Feb. 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 Pure Cycle (PCYO) Overvalued in 2026?
Based on GuruFocus' analysis, Pure Cycle stock appears to be undervalued.
The current stock price of $11.37 is trading 19.4% below its estimated GF Value™ of $14.11.
GuruFocus considers Pure Cycle to be Modestly Undervalued.
Key valuation signals for PCYO:
ROC %: 0.51%
GF Value™: $14.11 vs. price of $11.37 (19.4% below fair value)
Industry Position: 87.8% below the Utilities - Regulated median
No single metric tells the full story. See the PCYO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Pure Cycle Corp is a diversified land and water resource development company. The company designs, constructs, manages, operates, and maintains water and wastewater systems. The firm operates in three business segments namely Water and wastewater resource development, Land development, and the Single-Family Rental Segment. It generates maximum revenue from the Land development segment. The land resource development segment includes all the activities necessary to develop and sell finished lots.
72GF Score
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