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Yamaha (TSE:7951) Has More To Do To Multiply In Value Going Forward

Simply Wall St · 3d ago

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Although, when we looked at Yamaha (TSE:7951), it didn't seem to tick all of these boxes.

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Return On Capital Employed (ROCE): What Is It?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Yamaha, this is the formula:

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

0.076 = JP¥38b ÷ (JP¥598b - JP¥101b) (Based on the trailing twelve months to September 2025).

So, Yamaha has an ROCE of 7.6%. Ultimately, that's a low return and it under-performs the Leisure industry average of 12%.

See our latest analysis for Yamaha

roce
TSE:7951 Return on Capital Employed January 6th 2026

Above you can see how the current ROCE for Yamaha compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for Yamaha .

What Does the ROCE Trend For Yamaha Tell Us?

The returns on capital haven't changed much for Yamaha in recent years. The company has consistently earned 7.6% for the last five years, and the capital employed within the business has risen 30% in that time. This poor ROCE doesn't inspire confidence right now, and with the increase in capital employed, it's evident that the business isn't deploying the funds into high return investments.

What We Can Learn From Yamaha's ROCE

In conclusion, Yamaha has been investing more capital into the business, but returns on that capital haven't increased. Since the stock has declined 40% over the last five years, investors may not be too optimistic on this trend improving either. Therefore based on the analysis done in this article, we don't think Yamaha has the makings of a multi-bagger.

On a separate note, we've found 1 warning sign for Yamaha you'll probably want to know about.

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