VirnetX HoldingFRA:VN20 -0.93%40 WACC % is 7.89% as of Jul. 06, 2026, which is 8% below its 10-year median of 8.53. GuruFocus rates FRA:VN20 with a GF Score™ of 40/100 and a GF Value™ of €71.32 (Possible Value Trap). The stock has 5 warning signs investors should review. Among 2,907 Software companies, VirnetX Holding ranks worse than 96.66% on this metric.
As of today (2026-07-06), VirnetX Holding's weighted average cost of capital is 7.89%%. VirnetX Holding's ROIC % is -174.35% (calculated using TTM income statement data).
VirnetX Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
VirnetX Holding (FRA:VN20) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % 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, VirnetX Holding's weighted average cost of capital is 7.89%%. VirnetX Holding's ROIC % is -174.35% (calculated using TTM income statement data).
VirnetX Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
VirnetX Holding WACC % Historical Data
* Premium members only.
The historical data trend for VirnetX Holding's WACC % 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 Software - Infrastructure subindustry, VirnetX Holding's WACC %, along with its competitors' market caps and WACC % 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.
VirnetX Holding WACC % vs Software Industry
For the Software industry and Technology sector, VirnetX Holding's WACC % distribution charts can be found below:
* The bar in red indicates where VirnetX Holding's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, VirnetX Holding's market capitalization (E) is €45.946 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, VirnetX Holding's latest one-year quarterly average Book Value of Debt (D) is €0 Mil.
a) weight of equity = E / (E + D) = 45.946 / (45.946 + 0) = 1
b) weight of debt = D / (E + D) = 0 / (45.946 + 0) = 0
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.485%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. VirnetX Holding's beta is 0.5680.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.485% + 0.5680 * 6% = 7.893%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, VirnetX Holding's interest expense (positive number) was €-0 Mil. Its total Book Value of Debt (D) is €0 Mil.
Cost of Debt = -0 / 0 = %.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = -0.003 / -16.229 = 0.02%.
VirnetX Holding's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
1
*
7.893%
+
0
*
%
*
(1 - 0.02%)
=
7.89%
* 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.
VirnetX Holding (FRA:VN20) has a WACC % of 7.89% as of Jul. 06, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on VirnetX Holding and its competitors. This is near median its historical median of 8.53. Over the past decade, VirnetX Holding's WACC % has ranged from 3.25 to 22.47. According to the industry distribution chart, VirnetX Holding ranks #2810 out of 2907 companies in the Software industry, placing it in the top 96.7%.
Is VirnetX Holding's WACC % too high?
VirnetX Holding's current WACC % of 7.89% is near median its 10-year median of 8.53. Over the past 10 years, this metric has ranged from a low of 3.25 to a high of 22.47. The Software industry median WACC % is 8.99. VirnetX Holding's value of 7.89% is 12.2% below this industry median. Based on the distribution chart, VirnetX Holding ranks #2810 out of 2907 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, VirnetX Holding has a GF Score™ of 40/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does VirnetX Holding's WACC % compare to WHEN and RMXI?
According to the Software industry distribution chart, VirnetX Holding ranks #2810 out of 2907 companies for WACC %. This places VirnetX Holding in the lower half of its industry. The industry median WACC % is 8.99. VirnetX Holding's value of 7.89% is 12.2% below this benchmark. Historically, VirnetX Holding's own WACC % has ranged from 3.25 to 22.47 over the past decade. While the company's 10-year median is 8.53 vs. the industry median of 8.99, VirnetX Holding has consistently been below 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 WACC % for a Software company?
The median WACC % among Software companies is 8.99, based on 2,907 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. VirnetX Holding's current WACC % of 7.89% is 12.2% below 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 WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on VirnetX Holding and its competitors. For the Software industry, the median WACC % is 8.99 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. VirnetX Holding's current WACC % is 7.89%, which is near median its own 10-year median of 8.53. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is VirnetX Holding stock overvalued right now?
Based on GuruFocus' analysis, VirnetX Holding (FRA:VN20) is currently considered Possible Value Trap. The stock's GF Value™ is €71.32, compared to a current price of €10.70 — trading 85% below its estimated fair value. The current WACC % is 7.89%, which is near median its 10-year median of 8.53 and 12.2% below the Software industry median of 8.99. VirnetX Holding's overall GF Score™ is 40/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For VirnetX Holding (FRA:VN20), the current WACC % is 7.89% as of Jul. 06, 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 VirnetX Holding (FRA:VN20) Overvalued in 2026?
Based on GuruFocus' analysis, VirnetX Holding stock appears to be undervalued.
The current stock price of €10.70 is trading 85% below its estimated GF Value™ of €71.32.
GuruFocus considers VirnetX Holding to be Possible Value Trap.
Key valuation signals for FRA:VN20:
WACC %: 7.89% (near median its 10-year median of 8.53)
GF Value™: €71.32 vs. price of €10.70 (85% below fair value)
Industry Position: 12.2% below the Software median (#2810 of 2907)
No single metric tells the full story. See the FRA:VN20 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
VirnetX Holding Corp is engaged in the business of commercializing a portfolio of patents. It is an Internet security software and technology company with patented technology for secure communications. Its software and technology solutions, including its Secure Domain Name Registry and Technology, VirnetX One, War Room, VirnetX Matrix, and GABRIEL Connection Technology, are designed to be device and location-independent, and enable a secure real-time communication environment for all types of enterprise applications, services and critical infrastructures.
40GF Score
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