Should We Be Delighted With TeamViewer SE’s (ETR:TMV) ROE Of 72%?

Simply Wall St

Wed, February 11, 2026 at 1:16 PM GMT+9 3 min read

In this article:

TMVWF

+63.79%

TMVWY

-1.23%

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We’ll use ROE to examine TeamViewer SE (ETR:TMV), by way of a worked example.

Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company’s shareholders.

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How Is ROE Calculated?

ROE can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity

So, based on the above formula, the ROE for TeamViewer is:

72% = €118m ÷ €165m (Based on the trailing twelve months to December 2025).

The ‘return’ refers to a company’s earnings over the last year. One way to conceptualize this is that for each €1 of shareholders’ capital it has, the company made €0.72 in profit.

View our latest analysis for TeamViewer

Does TeamViewer Have A Good Return On Equity?

Arguably the easiest way to assess company’s ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As is clear from the image below, TeamViewer has a better ROE than the average (20%) in the Software industry.

XTRA:TMV Return on Equity February 11th 2026

That is a good sign. Bear in mind, a high ROE doesn’t always mean superior financial performance. A higher proportion of debt in a company’s capital structure may also result in a high ROE, where the high debt levels could be a huge risk .

How Does Debt Impact Return On Equity?

Most companies need money – from somewhere – to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won’t affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.

TeamViewer’s Debt And Its 72% ROE

It appears that TeamViewer makes extensive use of debt to improve its returns, because it has an alarmingly high debt to equity ratio of 5.72. Its ROE is clearly quite good, but it seems to be boosted by the significant use of debt by the company.

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Conclusion

Return on equity is useful for comparing the quality of different businesses. In our books, the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.

But when a business is high quality, the market often bids it up to a price that reflects this. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking this free report on analyst forecasts for the company.

If you would prefer check out another company – one with potentially superior financials – then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch** with us directly.**_ Alternatively, email editorial-team (at) simplywallst.com._

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.

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