ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. ELM Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 45.40%.
As of today (2026-07-06), ELM Co's WACC % is 11.37%. ELM Co's ROIC % is 44.67% (calculated using TTM income statement data).
ELM Co 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.
ELM Co (SAU:7203) 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, ELM Co's WACC % is 11.37%. ELM Co's ROIC % is 44.67% (calculated using TTM income statement data).
ELM Co 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.
ELM Co ROIC % Related Terms
ELM Co ROIC % Historical Data
* Premium members only.
The historical data trend for ELM Co'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 Information Technology Services subindustry, ELM Co'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.
ELM Co ROIC % vs Software Industry
For the Software industry and Technology sector, ELM Co's ROIC % distribution charts can be found below:
* The bar in red indicates where ELM Co'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.
ELM Co (SAU:7203) has a ROIC % of 45.40% 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 ELM Co and its competitors.
Is ELM Co's ROIC % too high?
ELM Co's current ROIC % is 45.40%. The Software industry median ROIC % is 3.05. ELM Co's value of 45.40% is 1391% above this industry median. Overall, ELM Co has a GF Score™ of 95/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does ELM Co's ROIC % compare to IBM and ACN?
ELM Co's ROIC % of 45.40% can be compared against companies in the Software industry. The industry median ROIC % is 3.05. ELM Co's value of 45.40% is 1391% 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 Software company?
The median ROIC % among Software companies is 3.05, based on 2,822 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. ELM Co's current ROIC % of 45.40% is 1391% 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 ELM Co and its competitors. For the Software industry, the median ROIC % is 3.05 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. ELM Co's current ROIC % is 45.40%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is ELM Co stock overvalued right now?
Based on GuruFocus' analysis, ELM Co (SAU:7203) is currently considered Significantly Undervalued. The stock's GF Value™ is ﷼1,447.96, compared to a current price of ﷼663.50 — trading 54.2% below its estimated fair value. The current ROIC % is 45.40% and 1391% above the Software industry median of 3.05. ELM Co's overall GF Score™ is 95/100 with 2 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 ELM Co (SAU:7203), the current ROIC % is 45.40% 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 ELM Co (SAU:7203) Overvalued in 2026?
Based on GuruFocus' analysis, ELM Co stock appears to be undervalued.
The current stock price of ﷼663.50 is trading 54.2% below its estimated GF Value™ of ﷼1,447.96.
GuruFocus considers ELM Co to be Significantly Undervalued.
Key valuation signals for SAU:7203:
ROIC %: 45.40%
GF Value™: ﷼1,447.96 vs. price of ﷼663.50 (54.2% below fair value)
Industry Position: 1391% above the Software median
No single metric tells the full story. See the SAU:7203 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
ELM Co mainly offers ready-made and customized digital solutions across different areas. Its ready-made solutions serve a broad segment of customers, who can subscribe to different packages of their choosing to meet their needs and satisfy business requirements. The services offered by the group include consulting, digital products, technical solutions, and business outsourcing, among others. The group's reportable segments are: Digital business, Business process outsourcing, and Professional services. Maximum revenue is generated from the Digital business, which includes ready-to-use solutions in the form of technical services, portals, electronic applications, and related support work, developed by the group to solve an existing problem or fill an existing service gap for its clients.
95GF Score
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