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The Return Trends At Sunrise Communications (VTX:SUNN) Look Promising

Simply Wall St · 2d ago

What are the early trends we should look for to identify a stock that could multiply in value over the long term? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. With that in mind, we've noticed some promising trends at Sunrise Communications (VTX:SUNN) so let's look a bit deeper.

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What Is 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 Sunrise Communications, this is the formula:

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

0.0073 = CHF77m ÷ (CHF12b - CHF1.4b) (Based on the trailing twelve months to September 2025).

Therefore, Sunrise Communications has an ROCE of 0.7%. In absolute terms, that's a low return and it also under-performs the Telecom industry average of 10%.

See our latest analysis for Sunrise Communications

roce
SWX:SUNN Return on Capital Employed December 10th 2025

In the above chart we have measured Sunrise Communications' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Sunrise Communications for free.

The Trend Of ROCE

We're delighted to see that Sunrise Communications is reaping rewards from its investments and has now broken into profitability. The company was generating losses three years ago, but has managed to turn it around and as we saw earlier is now earning 0.7%, which is always encouraging. While returns have increased, the amount of capital employed by Sunrise Communications 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. Because in the end, a business can only get so efficient.

The Bottom Line

In summary, we're delighted to see that Sunrise Communications has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And with a respectable 8.3% awarded to those who held the stock over the last year, you could argue that these developments are starting to get the attention they deserve. In light of that, we think it's worth looking further into this stock because if Sunrise Communications can keep these trends up, it could have a bright future ahead.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for SUNN on our platform that is definitely worth checking out.

While Sunrise Communications may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.