Investors Will Want Cyberjaya Education Group Berhad's (KLSE:CYBERE) Growth In ROCE To Persist

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Cyberjaya Education Group Berhad's (KLSE:CYBERE) returns on capital, so let's have a look.

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Understanding Return On Capital Employed (ROCE)

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Cyberjaya Education Group Berhad, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.061 = RM27m ÷ (RM524m - RM83m) (Based on the trailing twelve months to June 2025).

Thus, Cyberjaya Education Group Berhad has an ROCE of 6.1%. In absolute terms, that's a low return and it also under-performs the Consumer Services industry average of 10%.

See our latest analysis for Cyberjaya Education Group Berhad

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Cyberjaya Education Group Berhad has performed in the past in other metrics, you can view this free graph of Cyberjaya Education Group Berhad's past earnings, revenue and cash flow.

What Can We Tell From Cyberjaya Education Group Berhad's ROCE Trend?

We're delighted to see that Cyberjaya Education Group Berhad is reaping rewards from its investments and has now broken into profitability. While the business was unprofitable in the past, it's now turned things around and is earning 6.1% on its capital. While returns have increased, the amount of capital employed by Cyberjaya Education Group Berhad has remained flat over the period. So while we're happy that the business is more efficient, just keep in mind that could mean that going forward the business is lacking areas to invest internally for growth. So if you're looking for high growth, you'll want to see a business's capital employed also increasing.

Our Take On Cyberjaya Education Group Berhad's ROCE

In summary, we're delighted to see that Cyberjaya Education Group Berhad has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Investors may not be impressed by the favorable underlying trends yet because over the last five years the stock has only returned 39% to shareholders. So with that in mind, we think the stock deserves further research.

One final note, you should learn about the 3 warning signs we've spotted with Cyberjaya Education Group Berhad (including 1 which is a bit concerning) .

While Cyberjaya Education Group Berhad isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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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.