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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 %. Strategic Education's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 6.92%.
As of today (2026-07-25), Strategic Education's WACC % is 6.52%. Strategic Education's ROC % is 7.40% (calculated using TTM income statement data).
Strategic Education 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.
Strategic Education (NAS:STRA) 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, Strategic Education's WACC % is 6.52%. Strategic Education's ROC % is 7.40% (calculated using TTM income statement data).
Strategic Education 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.
Strategic Education ROC % Related Terms
Strategic Education ROC % Historical Data
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The historical data trend for Strategic Education'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.
Strategic Education (STRA) has a ROC % of 6.92% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Strategic Education and its competitors.
Is Strategic Education's ROC % too high?
Strategic Education's current ROC % is 6.92%. The Education industry median ROC % is 5.04. Strategic Education's value of 6.92% is 37.3% above this industry median. Overall, Strategic Education has a GF Score™ of 76/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Strategic Education's ROC % compare to MH and COUR?
Strategic Education's ROC % of 6.92% can be compared against companies in the Education industry. The industry median ROC % is 5.04. Strategic Education's value of 6.92% is 37.3% 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 an Education company?
The median ROC % among Education companies is 5.04, based on 259 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. Strategic Education's current ROC % of 6.92% is 37.3% 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 Strategic Education and its competitors. For the Education industry, the median ROC % is 5.04 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Strategic Education's current ROC % is 6.92%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Strategic Education stock overvalued right now?
Based on GuruFocus' analysis, Strategic Education (STRA) is currently considered Modestly Undervalued. The stock's GF Value™ is $98.62, compared to a current price of $75.64 — trading 23.3% below its estimated fair value. The current ROC % is 6.92% and 37.3% above the Education industry median of 5.04. Strategic Education's overall GF Score™ is 76/100 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 Strategic Education (STRA), the current ROC % is 6.92% 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 Strategic Education (STRA) Overvalued in 2026?
Based on GuruFocus' analysis, Strategic Education stock appears to be undervalued.
The current stock price of $75.64 is trading 23.3% below its estimated GF Value™ of $98.62.
GuruFocus considers Strategic Education to be Modestly Undervalued.
Key valuation signals for STRA:
ROC %: 6.92%
GF Value™: $98.62 vs. price of $75.64 (23.3% below fair value)
Industry Position: 37.3% above the Education median
No single metric tells the full story. See the STRA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Strategic Education Inc. is an education services company that provides access to high-quality education through campus-based and online post-secondary education offerings, as well as through programs to develop job-ready skills for high-demand markets. The company operates through wholly-owned subsidiaries Strayer University and Capella University, both accredited post-secondary institutions of higher education located in the United States, as well as Torrens University, an accredited post-secondary institution of higher education located in Australia. It provide employees with access to affordable and industry relevant training, certificate, and degree programs. The reportable segments of the company are U.S. Higher Education, Australia/New Zealand and Education Technology Services.
76GF Score
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