ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Paradox Interactive AB's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 19.47%.
As of today (2026-06-26), Paradox Interactive AB's WACC % is 3.42%. Paradox Interactive AB's ROIC % is 3.63% (calculated using TTM income statement data).
Paradox Interactive AB 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.
Paradox Interactive AB (FRA:ETA) 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, Paradox Interactive AB's WACC % is 3.42%. Paradox Interactive AB's ROIC % is 3.63% (calculated using TTM income statement data).
Paradox Interactive AB 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 %, 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.
* 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 Electronic Gaming & Multimedia subindustry, Paradox Interactive AB'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.
Paradox Interactive AB ROIC % vs Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Paradox Interactive AB's ROIC % distribution charts can be found below:
* The bar in red indicates where Paradox Interactive AB'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.
Paradox Interactive AB (FRA:ETA) has a ROIC % of 19.47% 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 Paradox Interactive AB and its competitors.
Is Paradox Interactive AB's ROIC % too high?
Paradox Interactive AB's current ROIC % is 19.47%. The Interactive Media industry median ROIC % is 1.88. Paradox Interactive AB's value of 19.47% is 935.6% above this industry median. Overall, Paradox Interactive AB has a GF Score™ of 80/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Paradox Interactive AB's ROIC % compare to NTES and EA?
Paradox Interactive AB's ROIC % of 19.47% can be compared against companies in the Interactive Media industry. The industry median ROIC % is 1.88. Paradox Interactive AB's value of 19.47% is 935.6% 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 an Interactive Media company?
The median ROIC % among Interactive Media companies is 1.88, based on 560 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. Paradox Interactive AB's current ROIC % of 19.47% is 935.6% 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 Paradox Interactive AB and its competitors. For the Interactive Media industry, the median ROIC % is 1.88 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Paradox Interactive AB's current ROIC % is 19.47%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Paradox Interactive AB stock overvalued right now?
Based on GuruFocus' analysis, Paradox Interactive AB (FRA:ETA) is currently considered Significantly Undervalued. The stock's GF Value™ is €16.07, compared to a current price of €11.12 — trading 30.8% below its estimated fair value. The current ROIC % is 19.47% and 935.6% above the Interactive Media industry median of 1.88. Paradox Interactive AB's overall GF Score™ is 80/100 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 Paradox Interactive AB (FRA:ETA), the current ROIC % is 19.47% 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 Paradox Interactive AB (FRA:ETA) Overvalued in 2026?
Based on GuruFocus' analysis, Paradox Interactive AB stock appears to be undervalued.
The current stock price of €11.12 is trading 30.8% below its estimated GF Value™ of €16.07.
GuruFocus considers Paradox Interactive AB to be Significantly Undervalued.
Key valuation signals for FRA:ETA:
ROIC %: 19.47%
GF Value™: €16.07 vs. price of €11.12 (30.8% below fair value)
Industry Position: 935.6% above the Interactive Media median
No single metric tells the full story. See the FRA:ETA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Paradox Interactive AB is a Swedish company. It is engaged in the development and publishing of PC-based games. The company's product portfolio includes franchise brands such as Stellaris, Europa Universalis, Hearts of Iron, Crusader Kings, Cities, Skylines, Tyranny and Magicka. Paradox is also involved in the publishing and internal development of games and licensing of White Wolf's brands. The company distributes its games through the digital platform Steam as well as on Apple, Google Play, and Sony stores. It operates its business across the world. The majority of the company's revenue comes from the United States, while it also has its presence in Sweden, Rest of Europe and Rest of the World.
80GF Score
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