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3-Year Return on Invested Incremental Capital (3-Year ROIIC %) measures the change in earnings as a percentage of change in investment over 3-year.
Applied Optoelectronics's 3-Year ROIIC % for the quarter that ended in Dec. 2025 was 3.94%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for Applied Optoelectronics's 3-Year ROIIC % or its related term are showing as below:
AAOI's 3-Year ROIIC % is ranked better than 52.51% of 2371
companies
in the Hardware industry
Industry Median: 2.34
vs AAOI: 3.94
Return on Incremental Invested Capital (ROIIC) is an extension of Return on Investment Capital (ROIC). ROIC % tells investors how efficiently that profitability is earned per dollar of company capital. ROIIC narrows the focus even further and shows how profitable each additional unit of capital investment could be. ROIIC % is a more powerful metric than ROIC because it measures how much money the company can generate going forward on future capital investments.
High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
Be Aware
It's important to keep in mind that when tracking ROIIC, the metric is better suited to forecasting the trend of future returns rather than measuring current return on investment.
Applied Optoelectronics 3-Year ROIIC % Related Terms
Applied Optoelectronics 3-Year ROIIC % Historical Data
* 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.
AAOI vs VIAV, VSAT, ONDS: 3-Year ROIIC % Comparison
For the Communication Equipment subindustry, Applied Optoelectronics's 3-Year ROIIC %, along with its competitors' market caps and 3-Year ROIIC % 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.
Applied Optoelectronics 3-Year ROIIC % vs Hardware Industry
For the Hardware industry and Technology sector, Applied Optoelectronics's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where Applied Optoelectronics's 3-Year ROIIC % falls into.
Applied Optoelectronics's 3-Year ROIIC % for the quarter that ended in Dec. 2025 is calculated as:
3-Year ROIIC %
=
3-Year Incremental Net Operating Profit After Taxes (NOPAT)**
/
3-Year Incremental Invested Capital**
=
( -40.708916 (Dec. 2025) - -58.838 (Dec. 2022) )
/
( 781.654 (Dec. 2025) - 321.992 (Dec. 2022) )
=
18.129084
/
459.662
=
3.94%***
* 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.
** Annual data of NOPAT and Invested Capital was used to calculate 3-Year ROIIC %.
*** Please be aware that the ROIIC (Return on Invested Capital) calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
Applied Optoelectronics (AAOI) has a 3-Year ROIIC % of 3.94 as of Dec. 2025. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Applied Optoelectronics and its competitors. According to the industry distribution chart, Applied Optoelectronics ranks #1126 out of 2371 companies in the Hardware industry, placing it in the top 47.5%.
Is Applied Optoelectronics' 3-Year ROIIC % too high?
Applied Optoelectronics' current 3-Year ROIIC % is 3.94. The Hardware industry median 3-Year ROIIC % is 2.34. Applied Optoelectronics' value of 3.94 is 68.4% above this industry median. Based on the distribution chart, Applied Optoelectronics ranks #1126 out of 2371 companies in the Hardware industry, which is above the industry midpoint. Overall, Applied Optoelectronics has a GF Score™ of 46/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Applied Optoelectronics' 3-Year ROIIC % compare to VIAV and VSAT?
According to the Hardware industry distribution chart, Applied Optoelectronics ranks #1126 out of 2371 companies for 3-Year ROIIC %. This puts Applied Optoelectronics in the upper half of its industry. The industry median 3-Year ROIIC % is 2.34. Applied Optoelectronics' value of 3.94 is 68.4% 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 3-Year ROIIC % for a Hardware company?
The median 3-Year ROIIC % among Hardware companies is 2.34, based on 2,371 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year ROIIC % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year ROIIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Applied Optoelectronics's current 3-Year ROIIC % of 3.94 is 68.4% 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 3-Year ROIIC % mean?
A high 3-Year ROIIC % can signal that a stock is expensive relative to its fundamentals. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Applied Optoelectronics and its competitors. For the Hardware industry, the median 3-Year ROIIC % is 2.34 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Applied Optoelectronics's current 3-Year ROIIC % is 3.94. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Applied Optoelectronics stock overvalued right now?
Based on GuruFocus' analysis, Applied Optoelectronics (AAOI) is currently considered Significantly Overvalued. The stock's GF Value™ is $20.24, compared to a current price of $100.19 — trading 395% above its estimated fair value. The current 3-Year ROIIC % is 3.94 and 68.4% above the Hardware industry median of 2.34. Applied Optoelectronics' overall GF Score™ is 46/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year ROIIC % calculated?
3-Year ROIIC % is calculated from a company's financial statements. For Applied Optoelectronics (AAOI), the current 3-Year ROIIC % is 3.94 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 Applied Optoelectronics (AAOI) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Optoelectronics stock appears to be overvalued.
The current stock price of $100.19 is trading 395% above its estimated GF Value™ of $20.24.
GuruFocus considers Applied Optoelectronics to be Significantly Overvalued.
Key valuation signals for AAOI:
3-Year ROIIC %: 3.94
GF Value™: $20.24 vs. price of $100.19 (395% above fair value)
Industry Position: 68.4% above the Hardware median (#1126 of 2371)
No single metric tells the full story. See the AAOI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Applied Optoelectronics Inc is a provider of fiber-optic networking products, for four networking end-markets; internet data center, CATV, telecom, and FTTH. The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies, and modules to meet turn-key equipment. Through direct sales personnel, and manufacturing teams in the United States, China, and Taiwan, the company coordinates with customers to determine product design, qualifications, and performance. The Company has manufacturing and research and development facilities located in the U.S., Taiwan, and China.
46GF Score
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