The a2 Milk CoASX:A2M +1.03%83 Operating Margin % is 13.78% as of Dec. 2025, which is 4% above its 10-year median of 13.21. GuruFocus rates ASX:A2M with a GF Score™ of 83/100 and a GF Value™ of A$6.68 (Fairly Valued). The stock has 3 warning signs investors should review. Among 1,951 Consumer Packaged Goods companies, The a2 Milk Co ranks better than 81.96% on this metric.
The a2 Milk Co Ltd operating margin has been in a 5-year decline. The average rate of decline per year is -12.3%.
The historical rank and industry rank for The a2 Milk Co's Operating Margin % or its related term are showing as below:
ASX:A2M'
s Operating Margin % Range Over the Past 10 Years
Min: 8.87 Med: 13.21 Max: 31.68
Current: 13.39
ASX:A2M's Operating Margin % is ranked better than 81.96% of 1951
companies
in the Consumer Packaged Goods industry
Industry Median: 5.26
vs ASX:A2M: 13.39
The a2 Milk Co's 5-Year Average Operating Margin % Growth Rate was -12.30% per year.
The a2 Milk Co (ASX:A2M) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
The a2 Milk Co Operating Margin % Related Terms
The a2 Milk Co Operating Margin % Historical Data
* Premium members only.
The historical data trend for The a2 Milk Co's Operating Margin % 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.
ASX:A2M vs KHC, GIS: Operating Margin % Comparison
For the Packaged Foods subindustry, The a2 Milk Co's Operating Margin %, along with its competitors' market caps and Operating Margin % 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.
The a2 Milk Co Operating Margin % vs Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, The a2 Milk Co's Operating Margin % distribution charts can be found below:
* The bar in red indicates where The a2 Milk Co's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
The a2 Milk Co's Operating Margin % for the fiscal year that ended in Jun. 2025 is calculated as
* 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.
The a2 Milk Co (ASX:A2M) has a Operating Margin % of 13.78% as of Dec. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on The a2 Milk Co and its competitors. This is near median its historical median of 13.21. Over the past decade, The a2 Milk Co's Operating Margin % has ranged from 8.87 to 31.68. According to the industry distribution chart, The a2 Milk Co ranks #352 out of 1951 companies in the Consumer Packaged Goods industry, placing it in the top 18%.
Is The a2 Milk Co's Operating Margin % too high?
The a2 Milk Co's current Operating Margin % of 13.78% is near median its 10-year median of 13.21. Over the past 10 years, this metric has ranged from a low of 8.87 to a high of 31.68. The Consumer Packaged Goods industry median Operating Margin % is 5.26. The a2 Milk Co's value of 13.78% is 162% above this industry median. Based on the distribution chart, The a2 Milk Co ranks #352 out of 1951 companies in the Consumer Packaged Goods industry, which is in the top quartile — a strong position relative to peers. Overall, The a2 Milk Co has a GF Score™ of 83/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does The a2 Milk Co's Operating Margin % compare to KHC and GIS?
According to the Consumer Packaged Goods industry distribution chart, The a2 Milk Co ranks #352 out of 1951 companies for Operating Margin %. This places The a2 Milk Co in the top 18% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 5.26. The a2 Milk Co's value of 13.78% is 162% above this benchmark. Historically, The a2 Milk Co's own Operating Margin % has ranged from 8.87 to 31.68 over the past decade. While the company's 10-year median is 13.21 vs. the industry median of 5.26, The a2 Milk Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Consumer Packaged Goods company?
The median Operating Margin % among Consumer Packaged Goods companies is 5.26, based on 1,951 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The a2 Milk Co's current Operating Margin % of 13.78% is 162% 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on The a2 Milk Co and its competitors. For the Consumer Packaged Goods industry, the median Operating Margin % is 5.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The a2 Milk Co's current Operating Margin % is 13.78%, which is near median its own 10-year median of 13.21. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The a2 Milk Co stock overvalued right now?
Based on GuruFocus' analysis, The a2 Milk Co (ASX:A2M) is currently considered Fairly Valued. The stock's GF Value™ is A$6.68, compared to a current price of A$6.85 — trading 2.5% above its estimated fair value. The current Operating Margin % is 13.78%, which is near median its 10-year median of 13.21 and 162% above the Consumer Packaged Goods industry median of 5.26. The a2 Milk Co's overall GF Score™ is 83/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For The a2 Milk Co (ASX:A2M), the current Operating Margin % is 13.78% as of Dec. 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.
Is The a2 Milk Co (ASX:A2M) Overvalued in 2026?
Based on GuruFocus' analysis, The a2 Milk Co stock appears to be overvalued.
The current stock price of A$6.85 is trading 2.5% above its estimated GF Value™ of A$6.68.
GuruFocus considers The a2 Milk Co to be Fairly Valued.
Key valuation signals for ASX:A2M:
Operating Margin %: 13.78% (near median its 10-year median of 13.21)
GF Value™: A$6.68 vs. price of A$6.85 (2.5% above fair value)
Industry Position: 162% above the Consumer Packaged Goods median (#352 of 1951)
No single metric tells the full story. See the ASX:A2M stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
A2 Milk is a New Zealand licensor and marketer of fresh milk, infant formula, and other dairy products that lack the A1 beta-casein protein. The firm was founded in 2000 by Corran McLachlan, who developed a genetic test to determine which proteins a cow produces in its milk, and business partner Howard Paterson. The company has been through a tumultuous history of receivership, legal battles, and strategic shifts, but emerged in its current structure in 2006 and listed publicly in March 2013.
83GF Score
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