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.
Walgreens Boots Alliance Operating Margin % Related Terms
Walgreens Boots Alliance Operating Margin % Historical Data
* 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.
BUE:WBA vs WGRX, PETS, BHIC: Operating Margin % Comparison
For the Pharmaceutical Retailers subindustry, Walgreens Boots Alliance'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.
Walgreens Boots Alliance Operating Margin % vs Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Walgreens Boots Alliance's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Walgreens Boots Alliance'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.
Walgreens Boots Alliance's Operating Margin % for the fiscal year that ended in Aug. 2024 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.
Walgreens Boots Alliance (BUE:WBA) has a Operating Margin % of 0.03% as of May. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on Walgreens Boots Alliance and its competitors. This is 99% below median its historical median of 3.23.
Is Walgreens Boots Alliance's Operating Margin % too high?
Walgreens Boots Alliance's current Operating Margin % of 0.03% is 99% below median its 10-year median of 3.23. The Healthcare Providers & Services industry median Operating Margin % is 4.85. Walgreens Boots Alliance's value of 0.03% is 99.4% below this industry median. Overall, Walgreens Boots Alliance has a GF Score™ of 15/100, reflecting its overall financial health beyond just this single metric.
How does Walgreens Boots Alliance's Operating Margin % compare to WGRX and PETS?
Walgreens Boots Alliance's Operating Margin % of 0.03% can be compared against companies in the Healthcare Providers & Services industry. The industry median Operating Margin % is 4.85. Walgreens Boots Alliance's value of 0.03% is 99.4% below this benchmark. While the company's 10-year median is 3.23 vs. the industry median of 4.85, Walgreens Boots Alliance has consistently been below 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 Healthcare Providers & Services company?
The median Operating Margin % among Healthcare Providers & Services companies is 4.85, based on 668 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. Walgreens Boots Alliance's current Operating Margin % of 0.03% is 99.4% below 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 Walgreens Boots Alliance and its competitors. For the Healthcare Providers & Services industry, the median Operating Margin % is 4.85 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Walgreens Boots Alliance's current Operating Margin % is 0.03%, which is 99% below median its own 10-year median of 3.23. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Walgreens Boots Alliance stock overvalued right now?
Walgreens Boots Alliance (BUE:WBA) has a current Operating Margin % of 0.03%. The current Operating Margin % is 0.03%, which is 99% below median its 10-year median of 3.23 and 99.4% below the Healthcare Providers & Services industry median of 4.85. Walgreens Boots Alliance's overall GF Score™ is 15/100 with 7 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 Walgreens Boots Alliance (BUE:WBA), the current Operating Margin % is 0.03% as of May. 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.
Walgreens Boots Alliance is one of the largest retail pharmacy chains in the US, with over 8,000 locations. Nearly three quarters of Americans live within five miles of a Walgreens location. Roughly two thirds of revenue is generated from prescription drug sales; Walgreens makes up 20% of total prescription revenue in the US. Walgreens also generates sales from retail products (general wellness consumables and its own branded merchandise), European drug wholesale, and healthcare. With more locations incorporating additional services like Health Corner and Village Medical, Walgreens creates an omnichannel experience for patients and positions itself as a one-stop healthcare provider.
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