Returns On Capital At Viomi Technology (NASDAQ:VIOT) Have Hit The Brakes

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. However, after investigating Viomi Technology (NASDAQ:VIOT), we don't think it's current trends fit the mold of a multi-bagger.This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. What Is Return On Capital Employed (ROCE)? For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Viomi Technology is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = CN¥203m ÷ (CN¥2.9b - CN¥1.3b) (Based on the trailing twelve months to June 2025). So, Viomi Technology has an ROCE of 12%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Consumer Durables industry average of 13%. Check out our latest analysis for Viomi Technology NasdaqGS:VIOT Return on Capital Employed December 29th 2025 In the above chart we have measured Viomi Technology's 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 Viomi Technology for free. What The Trend Of ROCE Can Tell Us Over the past five years, Viomi Technology's ROCE and capital employed have both remained mostly flat. It's not uncommon to see this when looking at a mature and stable business that isn't re-investing its earnings because it has likely passed that phase of the business cycle. So don't be surprised if Viomi Technology doesn't end up being a multi-bagger in a few years time. On a separate but related note, it's important to know that Viomi Technology has a current liabilities to total assets ratio of 44%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. The Bottom Line On Viomi Technology's ROCE In summary, Viomi Technology isn't compounding its earnings but is generating stable returns on the same amount of capital employed. Since the stock has declined 62% over the last five years, investors may not be too optimistic on this trend improving either. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere. Viomi Technology does have some risks though, and we've spotted 1 warning sign for Viomi Technology that you might be interested in. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech