Kumagai Gumi CoKMGGF +0.87%79 WACC % is 30.02% as of Jun. 30, 2026, which is 736% above its 10-year median of 3.59. GuruFocus rates KMGGF with a GF Score™ of 79/100 and a GF Value™ of $8.45. The stock has 5 warning signs investors should review. Among 1,804 Construction companies, Kumagai Gumi Co ranks better than 77.61% on this metric.
As of today (2026-06-30), Kumagai Gumi Co's weighted average cost of capital is 30.02%%. Kumagai Gumi Co's ROIC % is 5.71% (calculated using TTM income statement data).
Kumagai Gumi Co 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.
Kumagai Gumi Co (OTCPK:KMGGF) 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, Kumagai Gumi Co's weighted average cost of capital is 30.02%%. Kumagai Gumi Co's ROIC % is 5.71% (calculated using TTM income statement data).
Kumagai Gumi Co 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
Kumagai Gumi Co WACC % Historical Data
* Premium members only.
The historical data trend for Kumagai Gumi Co'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 Engineering & Construction subindustry, Kumagai Gumi Co'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.
Kumagai Gumi Co WACC % vs Construction Industry
For the Construction industry and Industrials sector, Kumagai Gumi Co's WACC % distribution charts can be found below:
* The bar in red indicates where Kumagai Gumi Co'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, Kumagai Gumi Co's market capitalization (E) is $1518.168 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, Kumagai Gumi Co's latest one-year quarterly average Book Value of Debt (D) is $388.2156 Mil.
a) weight of equity = E / (E + D) = 1518.168 / (1518.168 + 388.2156) = 0.7964
b) weight of debt = D / (E + D) = 388.2156 / (1518.168 + 388.2156) = 0.2036
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 2.65%. 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. Kumagai Gumi Co's beta is 5.7922.
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 = 2.65% + 5.7922 * 6% = 37.4032%
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, Kumagai Gumi Co's interest expense (positive number) was $6.543 Mil. Its total Book Value of Debt (D) is $388.2156 Mil.
Cost of Debt = 6.543 / 388.2156 = 1.6854%.
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 = 63.853 / 193.56 = 32.99%.
Kumagai Gumi Co'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)
=
0.7964
*
37.4032%
+
0.2036
*
1.6854%
*
(1 - 32.99%)
=
30.02%
* 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.
Kumagai Gumi Co (KMGGF) has a WACC % of 30.02% as of Jun. 30, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Kumagai Gumi Co and its competitors. This is 736% above median its historical median of 3.59. Over the past decade, Kumagai Gumi Co's WACC % has ranged from 1.31 to 4.99. According to the industry distribution chart, Kumagai Gumi Co ranks #404 out of 1804 companies in the Construction industry, placing it in the top 22.4%.
Is Kumagai Gumi Co's WACC % too high?
Kumagai Gumi Co's current WACC % of 30.02% is 736% above median its 10-year median of 3.59. Over the past 10 years, this metric has ranged from a low of 1.31 to a high of 4.99. The Construction industry median WACC % is 7.68. Kumagai Gumi Co's value of 30.02% is 291.1% above this industry median. Based on the distribution chart, Kumagai Gumi Co ranks #404 out of 1804 companies in the Construction industry, which is in the top quartile — a strong position relative to peers. Overall, Kumagai Gumi Co has a GF Score™ of 79/100, reflecting its overall financial health beyond just this single metric.
How does Kumagai Gumi Co's WACC % compare to PWR and FIX?
According to the Construction industry distribution chart, Kumagai Gumi Co ranks #404 out of 1804 companies for WACC %. This places Kumagai Gumi Co in the top 22% of its industry — outperforming the majority of peers. The industry median WACC % is 7.68. Kumagai Gumi Co's value of 30.02% is 291.1% above this benchmark. Historically, Kumagai Gumi Co's own WACC % has ranged from 1.31 to 4.99 over the past decade. While the company's 10-year median is 3.59 vs. the industry median of 7.68, Kumagai Gumi Co 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 WACC % for a Construction company?
The median WACC % among Construction companies is 7.68, based on 1,804 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. Kumagai Gumi Co's current WACC % of 30.02% is 291.1% 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 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 Kumagai Gumi Co and its competitors. For the Construction industry, the median WACC % is 7.68 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Kumagai Gumi Co's current WACC % is 30.02%, which is 736% above median its own 10-year median of 3.59. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Kumagai Gumi Co stock overvalued right now?
Kumagai Gumi Co (KMGGF) has a current WACC % of 30.02%. The stock's GF Value™ is $8.45, compared to a current price of $8.70 — trading 3% above its estimated fair value. The current WACC % is 30.02%, which is 736% above median its 10-year median of 3.59 and 291.1% above the Construction industry median of 7.68. Kumagai Gumi Co's overall GF Score™ is 79/100 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 Kumagai Gumi Co (KMGGF), the current WACC % is 30.02% as of Jun. 30, 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 Kumagai Gumi Co (KMGGF) Overvalued in 2026?
Based on GuruFocus' analysis, Kumagai Gumi Co stock appears to be overvalued.
The current stock price of $8.70 is trading 3% above its estimated GF Value™ of $8.45.
Key valuation signals for KMGGF:
WACC %: 30.02% (736% above median its 10-year median of 3.59)
GF Value™: $8.45 vs. price of $8.70 (3% above fair value)
Industry Position: 291.1% above the Construction median (#404 of 1804)
No single metric tells the full story. See the KMGGF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Kumagai Gumi Co Ltd is a Japanese company that provides services in construction and civil engineering. The company analyzes, designs, and supervises complex construction projects. It also offers engineering and technical services throughout the construction process. These projects include roads, railways, airports, water systems, and other public facilities. In addition, the company is engaged in manufacturing and selling construction materials and machinery. Construction activities account for the majority of revenue. The company generates additional revenue from developing residential and commercial complexes and either operating the building or acting as a broker and selling the real estate.
79GF Score
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