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Labat AfricaJSE:LAB Degree of Operating Leverage is -1.51 as of Nov. 2025. The stock has 5 warning signs investors should review. Among 935 Drug Manufacturers companies, Labat Africa ranks better than 73.58% on this metric.
Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Labat Africa's Degree of Operating Leverage for the quarter that ended in Nov. 2025 was -1.51. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Labat Africa's Degree of Operating Leverage or its related term are showing as below:
JSE:LAB's Degree of Operating Leverage is ranked better than 73.58% of 935
companies
in the Drug Manufacturers industry
Industry Median: 1.06
vs JSE:LAB: -1.51
Labat Africa (JSE:LAB) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Labat Africa Degree of Operating Leverage Related Terms
Labat Africa Degree of Operating Leverage Historical Data
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The historical data trend for Labat Africa's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
JSE:LAB vs ZTS, UTHR, VTRS: Degree of Operating Leverage Comparison
For the Drug Manufacturers - Specialty & Generic subindustry, Labat Africa's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Labat Africa Degree of Operating Leverage vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Labat Africa's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Labat Africa's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of -1.51 mean?
Labat Africa (JSE:LAB) has a Degree of Operating Leverage of -1.51 as of Nov. 2025. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Labat Africa and its competitors. According to the industry distribution chart, Labat Africa ranks #247 out of 935 companies in the Drug Manufacturers industry, placing it in the top 26.4%.
Is Labat Africa's Degree of Operating Leverage too high?
Labat Africa's current Degree of Operating Leverage is -1.51. Based on the distribution chart, Labat Africa ranks #247 out of 935 companies in the Drug Manufacturers industry, which is above the industry midpoint.
How does Labat Africa's Degree of Operating Leverage compare to ZTS and UTHR?
According to the Drug Manufacturers industry distribution chart, Labat Africa ranks #247 out of 935 companies for Degree of Operating Leverage. This puts Labat Africa in the upper half of its industry. The industry median Degree of Operating Leverage is 1.06. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Drug Manufacturers company?
The median Degree of Operating Leverage among Drug Manufacturers companies is 1.06, based on 935 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Labat Africa and its competitors. For the Drug Manufacturers industry, the median Degree of Operating Leverage is 1.06 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Labat Africa's current Degree of Operating Leverage is -1.51. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Labat Africa stock overvalued right now?
Based on GuruFocus' analysis, Labat Africa (JSE:LAB) is currently considered Possible Value Trap. The stock's GF Value™ is R0.18, compared to a current price of R0.03 — trading 83.3% below its estimated fair value. The current Degree of Operating Leverage is -1.51. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Labat Africa (JSE:LAB), the current Degree of Operating Leverage is -1.51 as of Nov. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Labat Africa Ltd is an investment holding company. Through its subsidiaries, the company operates in the following segments; Technology, Head office, and Healthcare. The Technology segment manufactures and distributes integrated circuits South African Micro - Electronic Systems. Head office operations provide management services, logistics and seeks further investment opportunities for the Group. The Healthcare segment generates maximum revenue for the company and focusses on medical cannabis industry in South Africa. Geographically, the company carries out its business operations in South Africa.
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