Will Objective's (ASX:OCL) Sustained 36% ROCE and Capital Growth Shift Its Investment Narrative?

• In late July 2025, Objective (ASX:OCL) reported a return on capital employed (ROCE) of 36%, comfortably exceeding the industry average of 14% and maintaining this high rate while expanding its capital base by over 160% in the last five years.
• This sustained operational strength points to Objective’s successful reinvestment strategies and the ability to generate profitable growth from its deployed resources.
• To better understand the impact of Objective’s consistently high and scalable returns, we’ll examine how this affects the company’s broader investment narrative.

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Objective Investment Narrative Recap

To be a shareholder in Objective, you need confidence in the company’s ability to consistently generate high returns from increased capital while executing its subscription software transition and expanding internationally. The recent report of a 36% ROCE highlights continued operational quality, but its direct effect on the most important short term catalyst, ongoing SaaS growth, or the biggest risk, softness in New Zealand’s Planning and Building Solutions business, appears minimal right now.

Among recent announcements, Objective’s latest half-year earnings update showcased steady growth, with higher sales and improved profit margins. This is particularly relevant, as it supports the narrative that strong returns and disciplined reinvestment are translating into tangible earnings growth, reinforcing the core catalyst tied to recurring revenue expansion.

By contrast, investors should also be mindful of the risk if customer adoption of Objective Nexus progresses slower than...

Read the full narrative on Objective (it's free!)

Objective's narrative projects A$160.9 million revenue and A$43.5 million earnings by 2028. This requires 10.0% yearly revenue growth and a A$11.6 million increase in earnings from the current A$31.9 million.

Uncover how Objective's forecasts yield a A$15.54 fair value, a 18% downside to its current price.

Exploring Other Perspectives

Four Simply Wall St Community fair value estimates for Objective range widely from A$6.82 to A$17.40 per share. While many see upside in scalable returns, customer adoption speed remains a crucial factor for future performance, so consider how differing forecasts reflect each risk and opportunity.

Explore 4 other fair value estimates on Objective - why the stock might be worth as much as A$17.40!

Build Your Own Objective Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Objective research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Objective research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Objective's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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