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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Luckin Coffee's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 10.12%.
As of today (2026-07-14), Luckin Coffee's WACC % is 4.23%. Luckin Coffee's ROIC % is 19.64% (calculated using TTM income statement data).
Luckin Coffee 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.
Luckin Coffee (LTS:0A6U) 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, Luckin Coffee's WACC % is 4.23%. Luckin Coffee's ROIC % is 19.64% (calculated using TTM income statement data).
Luckin Coffee 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.
Luckin Coffee ROIC % Related Terms
Luckin Coffee ROIC % Historical Data
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The historical data trend for Luckin Coffee'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 Restaurants subindustry, Luckin Coffee'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.
Luckin Coffee ROIC % vs Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Luckin Coffee's ROIC % distribution charts can be found below:
* The bar in red indicates where Luckin Coffee'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.
Luckin Coffee (LTS:0A6U) has a ROIC % of 10.12% 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 Luckin Coffee and its competitors.
Is Luckin Coffee's ROIC % too high?
Luckin Coffee's current ROIC % is 10.12%. The Restaurants industry median ROIC % is 4.24. Luckin Coffee's value of 10.12% is 138.7% above this industry median. Overall, Luckin Coffee has a GF Score™ of 82/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Luckin Coffee's ROIC % compare to EAT and CAVA?
Luckin Coffee's ROIC % of 10.12% can be compared against companies in the Restaurants industry. The industry median ROIC % is 4.24. Luckin Coffee's value of 10.12% is 138.7% 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 Restaurants company?
The median ROIC % among Restaurants companies is 4.24, based on 356 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. Luckin Coffee's current ROIC % of 10.12% is 138.7% 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 Luckin Coffee and its competitors. For the Restaurants industry, the median ROIC % is 4.24 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Luckin Coffee's current ROIC % is 10.12%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Luckin Coffee stock overvalued right now?
Based on GuruFocus' analysis, Luckin Coffee (LTS:0A6U) is currently considered Significantly Undervalued. The stock's GF Value™ is $20.48, compared to a current price of $12.54 — trading 38.8% below its estimated fair value. The current ROIC % is 10.12% and 138.7% above the Restaurants industry median of 4.24. Luckin Coffee's overall GF Score™ is 82/100 with 1 warning sign 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 Luckin Coffee (LTS:0A6U), the current ROIC % is 10.12% 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 Luckin Coffee (LTS:0A6U) Overvalued in 2026?
Based on GuruFocus' analysis, Luckin Coffee stock appears to be undervalued.
The current stock price of $12.54 is trading 38.8% below its estimated GF Value™ of $20.48.
GuruFocus considers Luckin Coffee to be Significantly Undervalued.
Key valuation signals for LTS:0A6U:
ROIC %: 10.12%
GF Value™: $20.48 vs. price of $12.54 (38.8% below fair value)
Industry Position: 138.7% above the Restaurants median
No single metric tells the full story. See the LTS:0A6U stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Luckin Coffee Inc operates a coffee network in China, providing retail services for freshly brewed drinks and pre-made food and beverage items. Its technology-driven model is built on mobile apps and a store network, offering a cashier-less purchase experience with features such as store selection, advance ordering, multiple payment options, and real-time order tracking. The company mainly operates self-operated pick-up stores in high-demand locations, enabling rapid and cost-efficient expansion, and also uses partnership and franchise models. It offers multiple products, including coffee, tea drinks, snacks, and light meals, with recipes tailored to local preferences, supported by sourcing and proprietary technology for operations and supply chain management.
82GF Score
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