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Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
PDF Solutions's Degree of Operating Leverage for the quarter that ended in Mar. 2026 was 12.37. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for PDF Solutions's Degree of Operating Leverage or its related term are showing as below:
PDFS's Degree of Operating Leverage is ranked worse than 88.11% of 2700
companies
in the Software industry
Industry Median: 0.61
vs PDFS: 12.37
PDF Solutions (NAS:PDFS) 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.
PDF Solutions Degree of Operating Leverage Related Terms
PDF Solutions Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for PDF Solutions'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.
PDFS vs INTA, EVCM, SPSC: Degree of Operating Leverage Comparison
For the Software - Application subindustry, PDF Solutions'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.
PDF Solutions Degree of Operating Leverage vs Software Industry
For the Software industry and Technology sector, PDF Solutions's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where PDF Solutions'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 12.37 mean?
PDF Solutions (PDFS) has a Degree of Operating Leverage of 12.37 as of Mar. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for PDF Solutions and its competitors. According to the industry distribution chart, PDF Solutions ranks #2379 out of 2700 companies in the Software industry, placing it in the top 88.1%.
Is PDF Solutions' Degree of Operating Leverage too high?
PDF Solutions' current Degree of Operating Leverage is 12.37. The Software industry median Degree of Operating Leverage is 0.61. PDF Solutions' value of 12.37 is 1927.9% above this industry median. Based on the distribution chart, PDF Solutions ranks #2379 out of 2700 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, PDF Solutions has a GF Score™ of 79/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does PDF Solutions' Degree of Operating Leverage compare to INTA and EVCM?
According to the Software industry distribution chart, PDF Solutions ranks #2379 out of 2700 companies for Degree of Operating Leverage. This places PDF Solutions in the lower half of its industry. The industry median Degree of Operating Leverage is 0.61. PDF Solutions' value of 12.37 is 1927.9% above this benchmark. 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 Software company?
The median Degree of Operating Leverage among Software companies is 0.61, based on 2,700 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. PDF Solutions's current Degree of Operating Leverage of 12.37 is 1927.9% above the industry median. 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 PDF Solutions and its competitors. For the Software industry, the median Degree of Operating Leverage is 0.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PDF Solutions's current Degree of Operating Leverage is 12.37. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is PDF Solutions stock overvalued right now?
Based on GuruFocus' analysis, PDF Solutions (PDFS) is currently considered Fairly Valued. The stock's GF Value™ is $42.19, compared to a current price of $43.89 — trading 4% above its estimated fair value. The current Degree of Operating Leverage is 12.37 and 1927.9% above the Software industry median of 0.61. PDF Solutions' overall GF Score™ is 79/100 with 3 warning signs to review. 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 PDF Solutions (PDFS), the current Degree of Operating Leverage is 12.37 as of Mar. 2026. 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.
Is PDF Solutions (PDFS) Overvalued in 2026?
Based on GuruFocus' analysis, PDF Solutions stock appears to be overvalued.
The current stock price of $43.89 is trading 4% above its estimated GF Value™ of $42.19.
GuruFocus considers PDF Solutions to be Fairly Valued.
Key valuation signals for PDFS:
Degree of Operating Leverage: 12.37
GF Value™: $42.19 vs. price of $43.89 (4% above fair value)
Industry Position: 1927.9% above the Software median (#2379 of 2700)
No single metric tells the full story. See the PDFS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
PDF Solutions Inc provides products and services designed to empower organizations across the semiconductor and electronics ecosystem to connect, collect, manage, and analyze data about design, equipment, manufacturing, and test to improve the yield and quality of their products and operational efficiency. The Company's products, services, and solutions include proprietary software, physical intellectual property (IP) for integrated circuit (IC) designs, electrical measurement hardware tools, methodologies, and professional services.
79GF Score
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Degree of Operating Leverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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