WEBULL

ONE Group Hospitality (NASDAQ:STKS) Shareholders Will Want The ROCE Trajectory To Continue

Simply Wall St · 6d ago

There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So when we looked at ONE Group Hospitality (NASDAQ:STKS) and its trend of ROCE, we really liked what we saw.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

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. The formula for this calculation on ONE Group Hospitality is:

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

0.056 = US$42m ÷ (US$880m - US$132m) (Based on the trailing twelve months to September 2025).

Therefore, ONE Group Hospitality has an ROCE of 5.6%. Ultimately, that's a low return and it under-performs the Hospitality industry average of 11%.

View our latest analysis for ONE Group Hospitality

roce
NasdaqCM:STKS Return on Capital Employed January 7th 2026

Above you can see how the current ROCE for ONE Group Hospitality compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for ONE Group Hospitality .

What Can We Tell From ONE Group Hospitality's ROCE Trend?

While in absolute terms it isn't a high ROCE, it's promising to see that it has been moving in the right direction. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 5.6%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 293%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

The Key Takeaway

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what ONE Group Hospitality has. Astute investors may have an opportunity here because the stock has declined 43% in the last five years. So researching this company further and determining whether or not these trends will continue seems justified.

One more thing, we've spotted 2 warning signs facing ONE Group Hospitality that you might find interesting.

While ONE Group Hospitality 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.