ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. AMTD Digital's annualized return on invested capital (ROIC %) for the quarter that ended in Oct. 2025 was -11.82%.
As of today (2026-06-29), AMTD Digital's WACC % is 7.66%. AMTD Digital's ROIC % is 1.21% (calculated using TTM income statement data).
AMTD Digital earns returns that do not match up to its cost of capital. It will destroy value as it grows.
AMTD Digital (NYSE:HKD) 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, AMTD Digital's WACC % is 7.66%. AMTD Digital's ROIC % is 1.21% (calculated using TTM income statement data).
AMTD Digital 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.
AMTD Digital ROIC % Related Terms
AMTD Digital ROIC % Historical Data
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The historical data trend for AMTD Digital'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 Software - Application subindustry, AMTD Digital'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.
AMTD Digital ROIC % vs Software Industry
For the Software industry and Technology sector, AMTD Digital's ROIC % distribution charts can be found below:
* The bar in red indicates where AMTD Digital's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Oct. 2025) 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.
AMTD Digital (HKD) has a ROIC % of -11.82% as of Oct. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on AMTD Digital and its competitors.
Is AMTD Digital's ROIC % too high?
AMTD Digital's current ROIC % is -11.82%. Overall, AMTD Digital has a GF Score™ of 64/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does AMTD Digital's ROIC % compare to OOMA and SMWB?
AMTD Digital's ROIC % of -11.82% can be compared against companies in the Software industry. The industry median ROIC % is 3.04. 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 Software company?
The median ROIC % among Software companies is 3.04, based on 2,826 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. 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 AMTD Digital and its competitors. For the Software industry, the median ROIC % is 3.04 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. AMTD Digital's current ROIC % is -11.82%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is AMTD Digital stock overvalued right now?
Based on GuruFocus' analysis, AMTD Digital (HKD) is currently considered Possible Value Trap. The stock's GF Value™ is $4.76, compared to a current price of $1.59 — trading 66.6% below its estimated fair value. The current ROIC % is -11.82%. AMTD Digital's overall GF Score™ is 64/100 with 8 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 AMTD Digital (HKD), the current ROIC % is -11.82% as of Oct. 2025. 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 AMTD Digital (HKD) Overvalued in 2026?
Based on GuruFocus' analysis, AMTD Digital stock appears to be undervalued.
The current stock price of $1.59 is trading 66.6% below its estimated GF Value™ of $4.76.
GuruFocus considers AMTD Digital to be Possible Value Trap.
Key valuation signals for HKD:
ROIC %: -11.82%
GF Value™: $4.76 vs. price of $1.59 (66.6% below fair value)
No single metric tells the full story. See the HKD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
AMTD Digital Inc along with its subsidiaries, is mainly involved in the provision of digital solutions services. Its reportable segments are digital solutions services segment; hotel operations, hospitality and VIP services segment; media and entertainment services segment; and Strategic investments. The company generates maximum revenue from Digital solutions services segment, which provides its institutional and corporate clients with exclusive, paid access to enhance their investor communication, investor relations and corporate communication to potentially maximize their valuation, as well as providing digital solution services. Geographically, the company generates revenue from China, Hong Kong, Europe, Americas and Southeast Asia.
64GF Score
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