ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Zurn Elkay Water Solutions's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 11.08%.
As of today (2026-07-04), Zurn Elkay Water Solutions's WACC % is 10.96%. Zurn Elkay Water Solutions's ROC % is 10.00% (calculated using TTM income statement data).
Zurn Elkay Water Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Zurn Elkay Water Solutions (NYSE:ZWS) 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, Zurn Elkay Water Solutions's WACC % is 10.96%. Zurn Elkay Water Solutions's ROC % is 10.00% (calculated using TTM income statement data).
Zurn Elkay Water Solutions 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 (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.
Zurn Elkay Water Solutions (ZWS) has a ROC % of 11.08% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Zurn Elkay Water Solutions and its competitors.
Is Zurn Elkay Water Solutions' ROC % too high?
Zurn Elkay Water Solutions' current ROC % is 11.08%. The Industrial Products industry median ROC % is 5.21. Zurn Elkay Water Solutions' value of 11.08% is 112.7% above this industry median. Overall, Zurn Elkay Water Solutions has a GF Score™ of 88/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Zurn Elkay Water Solutions' ROC % compare to CECO and PCT?
Zurn Elkay Water Solutions' ROC % of 11.08% can be compared against companies in the Industrial Products industry. The industry median ROC % is 5.21. Zurn Elkay Water Solutions' value of 11.08% is 112.7% 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 an Industrial Products company?
The median ROC % among Industrial Products companies is 5.21, based on 3,033 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. Zurn Elkay Water Solutions's current ROC % of 11.08% is 112.7% 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 Zurn Elkay Water Solutions and its competitors. For the Industrial Products industry, the median ROC % is 5.21 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zurn Elkay Water Solutions's current ROC % is 11.08%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zurn Elkay Water Solutions stock overvalued right now?
Based on GuruFocus' analysis, Zurn Elkay Water Solutions (ZWS) is currently considered Modestly Overvalued. The stock's GF Value™ is $40.38, compared to a current price of $49.16 — trading 21.7% above its estimated fair value. The current ROC % is 11.08% and 112.7% above the Industrial Products industry median of 5.21. Zurn Elkay Water Solutions' overall GF Score™ is 88/100 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 Zurn Elkay Water Solutions (ZWS), the current ROC % is 11.08% 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 Zurn Elkay Water Solutions (ZWS) Overvalued in 2026?
Based on GuruFocus' analysis, Zurn Elkay Water Solutions stock appears to be overvalued.
The current stock price of $49.16 is trading 21.7% above its estimated GF Value™ of $40.38.
GuruFocus considers Zurn Elkay Water Solutions to be Modestly Overvalued.
Key valuation signals for ZWS:
ROC %: 11.08%
GF Value™: $40.38 vs. price of $49.16 (21.7% above fair value)
Industry Position: 112.7% above the Industrial Products median
No single metric tells the full story. See the ZWS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zurn Elkay Water Solutions Corp is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment. Its product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products, and filtered drinking water products for public and private spaces that deliver superior value to building owners, positively impact the environment and human hygiene and reduce product installation time.
88GF Score
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