ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Avanos Medical's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 2.79%.
As of today (2026-06-25), Avanos Medical's WACC % is 17.33%. Avanos Medical's ROIC % is 1.63% (calculated using TTM income statement data).
Avanos Medical earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Avanos Medical (NYSE:AVNS) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Avanos Medical's WACC % is 17.33%. Avanos Medical's ROIC % is 1.63% (calculated using TTM income statement data).
Avanos Medical 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 %, ROIC % 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.
Avanos Medical ROIC % Related Terms
Avanos Medical ROIC % Historical Data
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The historical data trend for Avanos Medical's ROIC % 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.
For the Medical Devices subindustry, Avanos Medical's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Avanos Medical ROIC % vs Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Avanos Medical's ROIC % distribution charts can be found below:
* The bar in red indicates where Avanos Medical's ROIC % falls into.
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.
Avanos Medical (AVNS) has a ROIC % of 2.79% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Avanos Medical and its competitors.
Is Avanos Medical's ROIC % too high?
Avanos Medical's current ROIC % is 2.79%. The Medical Devices & Instruments industry median ROIC % is 1.27. Avanos Medical's value of 2.79% is 119.7% above this industry median. Overall, Avanos Medical has a GF Score™ of 62/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Avanos Medical's ROIC % compare to IRMD and TNDM?
Avanos Medical's ROIC % of 2.79% can be compared against companies in the Medical Devices & Instruments industry. The industry median ROIC % is 1.27. Avanos Medical's value of 2.79% is 119.7% 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 ROIC % for a Medical Devices & Instruments company?
The median ROIC % among Medical Devices & Instruments companies is 1.27, based on 847 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Avanos Medical's current ROIC % of 2.79% is 119.7% 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 ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Avanos Medical and its competitors. For the Medical Devices & Instruments industry, the median ROIC % is 1.27 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Avanos Medical's current ROIC % is 2.79%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Avanos Medical stock overvalued right now?
Based on GuruFocus' analysis, Avanos Medical (AVNS) is currently considered Modestly Overvalued. The stock's GF Value™ is $19.42, compared to a current price of $24.91 — trading 28.2% above its estimated fair value. The current ROIC % is 2.79% and 119.7% above the Medical Devices & Instruments industry median of 1.27. Avanos Medical's overall GF Score™ is 62/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Avanos Medical (AVNS), the current ROIC % is 2.79% 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 Avanos Medical (AVNS) Overvalued in 2026?
Based on GuruFocus' analysis, Avanos Medical stock appears to be overvalued.
The current stock price of $24.91 is trading 28.2% above its estimated GF Value™ of $19.42.
GuruFocus considers Avanos Medical to be Modestly Overvalued.
Key valuation signals for AVNS:
ROIC %: 2.79%
GF Value™: $19.42 vs. price of $24.91 (28.2% above fair value)
Industry Position: 119.7% above the Medical Devices & Instruments median
No single metric tells the full story. See the AVNS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Avanos Medical Inc is a medical technology company engaged in the development and commercialization of products for pain management and patient care. The company has two reportable segments: Specialty Nutrition Systems and Pain Management and Recovery. The Specialty Nutrition Systems segment provides enteral feeding and neonatal products. The Pain Management and Recovery segment offers surgical pain and recovery products, including pain pumps and radiofrequency ablation solutions for the treatment of chronic pain.
62GF Score
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