ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Telephone and Data Systems's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was -0.15%.
As of today (2026-06-25), Telephone and Data Systems's WACC % is 2.19%. Telephone and Data Systems's ROIC % is 0.24% (calculated using TTM income statement data).
Telephone and Data Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Telephone and Data Systems (NYSE:TDS) 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, Telephone and Data Systems's WACC % is 2.19%. Telephone and Data Systems's ROIC % is 0.24% (calculated using TTM income statement data).
Telephone and Data Systems 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.
* 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 Telecom Services subindustry, Telephone and Data Systems'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.
Telephone and Data Systems ROIC % vs Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, Telephone and Data Systems's ROIC % distribution charts can be found below:
* The bar in red indicates where Telephone and Data Systems'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.
Telephone and Data Systems (TDS) has a ROIC % of -0.15% 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 Telephone and Data Systems and its competitors.
Is Telephone and Data Systems' ROIC % too high?
Telephone and Data Systems' current ROIC % is -0.15%. Overall, Telephone and Data Systems has a GF Score™ of 64/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Telephone and Data Systems' ROIC % compare to AD and LBTYA?
Telephone and Data Systems' ROIC % of -0.15% can be compared against companies in the Telecommunication Services industry. The industry median ROIC % is 4.54. 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 Telecommunication Services company?
The median ROIC % among Telecommunication Services companies is 4.54, based on 366 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 Telephone and Data Systems and its competitors. For the Telecommunication Services industry, the median ROIC % is 4.54 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Telephone and Data Systems's current ROIC % is -0.15%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Telephone and Data Systems stock overvalued right now?
Based on GuruFocus' analysis, Telephone and Data Systems (TDS) is currently considered Modestly Overvalued. The stock's GF Value™ is $32.86, compared to a current price of $37.21 — trading 13.2% above its estimated fair value. The current ROIC % is -0.15%. Telephone and Data Systems' overall GF Score™ is 64/100 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 Telephone and Data Systems (TDS), the current ROIC % is -0.15% 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 Telephone and Data Systems (TDS) Overvalued in 2026?
Based on GuruFocus' analysis, Telephone and Data Systems stock appears to be overvalued.
The current stock price of $37.21 is trading 13.2% above its estimated GF Value™ of $32.86.
GuruFocus considers Telephone and Data Systems to be Modestly Overvalued.
Key valuation signals for TDS:
ROIC %: -0.15%
GF Value™: $32.86 vs. price of $37.21 (13.2% above fair value)
No single metric tells the full story. See the TDS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Telephone and Data Systems Inc is a diversified telecommunications operator that provides communications services to customers through broadband, video, voice, and wireless connections. The company has two reportable segments: TDS Telecom and Array. The majority of its revenue is generated from the TDS Telecom segment, which generates revenue by providing broadband, video, voice, and wireless services. The Array segment generates its revenue mainly by leasing tower space on Array-owned towers to customers.
64GF Score
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