BAE SystemsBAESY +1.25%89 3-Year ROIIC % is 8.25 as of Dec. 2025, which is 15% above its 10-year median of 7.16. GuruFocus rates BAESY with a GF Score™ of 89/100 and a GF Value™ of $91.77 (Modestly Overvalued). The stock has 2 warning signs investors should review. Among 320 Aerospace & Defense companies, BAE Systems ranks better than 58.12% on this metric.
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.
BAE Systems's 3-Year ROIIC % for the quarter that ended in Dec. 2025 was 8.25%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for BAE Systems's 3-Year ROIIC % or its related term are showing as below:
BAESY's 3-Year ROIIC % is ranked better than 58.12% of 320
companies
in the Aerospace & Defense industry
Industry Median: 3.79
vs BAESY: 8.25
BAE Systems (OTCPK:BAESY) 3-Year ROIIC % Explanation
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.
BAE Systems 3-Year ROIIC % Related Terms
BAE Systems 3-Year ROIIC % Historical Data
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The historical data trend for BAE Systems's 3-Year ROIIC % 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 Aerospace & Defense subindustry, BAE Systems'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.
BAE Systems 3-Year ROIIC % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, BAE Systems's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where BAE Systems's 3-Year ROIIC % falls into.
* 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.
BAE Systems (BAESY) has a 3-Year ROIIC % of 8.25 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 BAE Systems and its competitors. This is 15% above median its historical median of 7.16. Over the past decade, BAE Systems' 3-Year ROIIC % has ranged from 1.96 to 43.25. According to the industry distribution chart, BAE Systems ranks #134 out of 320 companies in the Aerospace & Defense industry, placing it in the top 41.9%.
Is BAE Systems' 3-Year ROIIC % too high?
BAE Systems' current 3-Year ROIIC % of 8.25 is 15% above median its 10-year median of 7.16. Over the past 10 years, this metric has ranged from a low of 1.96 to a high of 43.25. The Aerospace & Defense industry median 3-Year ROIIC % is 3.79. BAE Systems' value of 8.25 is 117.7% above this industry median. Based on the distribution chart, BAE Systems ranks #134 out of 320 companies in the Aerospace & Defense industry, which is above the industry midpoint. Overall, BAE Systems has a GF Score™ of 89/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does BAE Systems' 3-Year ROIIC % compare to SPCX and GE?
According to the Aerospace & Defense industry distribution chart, BAE Systems ranks #134 out of 320 companies for 3-Year ROIIC %. This puts BAE Systems in the upper half of its industry. The industry median 3-Year ROIIC % is 3.79. BAE Systems' value of 8.25 is 117.7% above this benchmark. Historically, BAE Systems' own 3-Year ROIIC % has ranged from 1.96 to 43.25 over the past decade. While the company's 10-year median is 7.16 vs. the industry median of 3.79, BAE Systems has consistently been above the industry average. 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 an Aerospace & Defense company?
The median 3-Year ROIIC % among Aerospace & Defense companies is 3.79, based on 320 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. BAE Systems's current 3-Year ROIIC % of 8.25 is 117.7% 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 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 BAE Systems and its competitors. For the Aerospace & Defense industry, the median 3-Year ROIIC % is 3.79 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. BAE Systems's current 3-Year ROIIC % is 8.25, which is 15% above median its own 10-year median of 7.16. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is BAE Systems stock overvalued right now?
Based on GuruFocus' analysis, BAE Systems (BAESY) is currently considered Modestly Overvalued. The stock's GF Value™ is $91.77, compared to a current price of $107.44 — trading 17.1% above its estimated fair value. The current 3-Year ROIIC % is 8.25, which is 15% above median its 10-year median of 7.16 and 117.7% above the Aerospace & Defense industry median of 3.79. BAE Systems' overall GF Score™ is 89/100 with 2 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 BAE Systems (BAESY), the current 3-Year ROIIC % is 8.25 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 BAE Systems (BAESY) Overvalued in 2026?
Based on GuruFocus' analysis, BAE Systems stock appears to be overvalued.
The current stock price of $107.44 is trading 17.1% above its estimated GF Value™ of $91.77.
GuruFocus considers BAE Systems to be Modestly Overvalued.
Key valuation signals for BAESY:
3-Year ROIIC %: 8.25 (15% above median its 10-year median of 7.16)
GF Value™: $91.77 vs. price of $107.44 (17.1% above fair value)
Industry Position: 117.7% above the Aerospace & Defense median (#134 of 320)
No single metric tells the full story. See the BAESY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the US Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's US- and UK-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the US government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the US Defense Department; the air segment includes BAE's share of US and European air programs as well as its businesses in Saudi Arabia and Australia, and the maritime segment comprises UK land- and marine-based activities.
89GF Score
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