ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. IDP Education's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 6.23%.
As of today (2026-06-27), IDP Education's WACC % is 6.83%. IDP Education's ROIC % is 2.08% (calculated using TTM income statement data).
IDP Education earns returns that do not match up to its cost of capital. It will destroy value as it grows.
IDP Education (OTCPK:IDPUF) 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, IDP Education's WACC % is 6.83%. IDP Education's ROIC % is 2.08% (calculated using TTM income statement data).
IDP Education 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.
IDP Education ROIC % Related Terms
IDP Education ROIC % Historical Data
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The historical data trend for IDP Education'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 Education & Training Services subindustry, IDP Education'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.
IDP Education ROIC % vs Education Industry
For the Education industry and Consumer Defensive sector, IDP Education's ROIC % distribution charts can be found below:
* The bar in red indicates where IDP Education's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 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.
IDP Education (IDPUF) has a ROIC % of 6.23% as of Dec. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on IDP Education and its competitors.
Is IDP Education's ROIC % too high?
IDP Education's current ROIC % is 6.23%. The Education industry median ROIC % is 5.00. IDP Education's value of 6.23% is 24.6% above this industry median. Overall, IDP Education has a GF Score™ of 60/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does IDP Education's ROIC % compare to EDU and TAL?
IDP Education's ROIC % of 6.23% can be compared against companies in the Education industry. The industry median ROIC % is 5.00. IDP Education's value of 6.23% is 24.6% 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 Education company?
The median ROIC % among Education companies is 5.00, based on 261 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. IDP Education's current ROIC % of 6.23% is 24.6% 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 IDP Education and its competitors. For the Education industry, the median ROIC % is 5.00 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. IDP Education's current ROIC % is 6.23%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is IDP Education stock overvalued right now?
Based on GuruFocus' analysis, IDP Education (IDPUF) is currently considered Significantly Undervalued. The stock's GF Value™ is $5.67, compared to a current price of $2.03 — trading 64.2% below its estimated fair value. The current ROIC % is 6.23% and 24.6% above the Education industry median of 5.00. IDP Education's overall GF Score™ is 60/100 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 IDP Education (IDPUF), the current ROIC % is 6.23% as of Dec. 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 IDP Education (IDPUF) Overvalued in 2026?
Based on GuruFocus' analysis, IDP Education stock appears to be undervalued.
The current stock price of $2.03 is trading 64.2% below its estimated GF Value™ of $5.67.
GuruFocus considers IDP Education to be Significantly Undervalued.
Key valuation signals for IDPUF:
ROIC %: 6.23%
GF Value™: $5.67 vs. price of $2.03 (64.2% below fair value)
Industry Position: 24.6% above the Education median
No single metric tells the full story. See the IDPUF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
IDP Education performs English language testing and student placement services globally, constituting 31% and 57% of fiscal 2025 group gross profit, respectively. Additionally, IDP operates English language schools, organizes education events, and delivers consultancy services to education institutions, which constitutes the remainder of group gross profit. Originally established in Australia as an aid body for Southeast Asia, today IDP operates one of the world's most widely accepted English language tests and one of the world's largest student placement services businesses, predominantly connecting prospective migrants from India and China to Australia, Canada, and the United Kingdom.
60GF Score
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