Federated HermesFHI -4.84%98 Operating Margin % is 27.09% as of Mar. 2026, which is 7% below its 10-year median of 29.16. GuruFocus rates FHI with a GF Score™ of 98/100 and a GF Value™ of $50.18 (Modestly Overvalued). The stock has 6 warning signs investors should review. Among 656 Asset Management companies, Federated Hermes ranks better than 59.76% on this metric.
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.
Federated Hermes Operating Margin % Related Terms
Federated Hermes Operating Margin % Historical Data
* Premium members only.
The historical data trend for Federated Hermes'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.
FHI vs DNP, STEP, UTG: Operating Margin % Comparison
For the Asset Management subindustry, Federated Hermes'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.
Federated Hermes Operating Margin % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, Federated Hermes's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Federated Hermes'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.
Federated Hermes's Operating Margin % for the fiscal year that ended in Dec. 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.
Federated Hermes (FHI) has a Operating Margin % of 27.09% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Federated Hermes and its competitors. This is near median its historical median of 29.16. Over the past decade, Federated Hermes' Operating Margin % has ranged from 24.94 to 30.96. According to the industry distribution chart, Federated Hermes ranks #264 out of 656 companies in the Asset Management industry, placing it in the top 40.2%.
Is Federated Hermes' Operating Margin % too high?
Federated Hermes' current Operating Margin % of 27.09% is near median its 10-year median of 29.16. Over the past 10 years, this metric has ranged from a low of 24.94 to a high of 30.96. The Asset Management industry median Operating Margin % is 16.73. Federated Hermes' value of 27.09% is 61.9% above this industry median. Based on the distribution chart, Federated Hermes ranks #264 out of 656 companies in the Asset Management industry, which is above the industry midpoint. Overall, Federated Hermes has a GF Score™ of 98/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Federated Hermes' Operating Margin % compare to DNP and STEP?
According to the Asset Management industry distribution chart, Federated Hermes ranks #264 out of 656 companies for Operating Margin %. This puts Federated Hermes in the upper half of its industry. The industry median Operating Margin % is 16.73. Federated Hermes' value of 27.09% is 61.9% above this benchmark. Historically, Federated Hermes' own Operating Margin % has ranged from 24.94 to 30.96 over the past decade. While the company's 10-year median is 29.16 vs. the industry median of 16.73, Federated Hermes 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 an Asset Management company?
The median Operating Margin % among Asset Management companies is 16.73, based on 656 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. Federated Hermes's current Operating Margin % of 27.09% is 61.9% 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 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 Federated Hermes and its competitors. For the Asset Management industry, the median Operating Margin % is 16.73 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Federated Hermes's current Operating Margin % is 27.09%, which is near median its own 10-year median of 29.16. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Federated Hermes stock overvalued right now?
Based on GuruFocus' analysis, Federated Hermes (FHI) is currently considered Modestly Overvalued. The stock's GF Value™ is $50.18, compared to a current price of $56.38 — trading 12.4% above its estimated fair value. The current Operating Margin % is 27.09%, which is near median its 10-year median of 29.16 and 61.9% above the Asset Management industry median of 16.73. Federated Hermes' overall GF Score™ is 98/100 with 6 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 Federated Hermes (FHI), the current Operating Margin % is 27.09% 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 Federated Hermes (FHI) Overvalued in 2026?
Based on GuruFocus' analysis, Federated Hermes stock appears to be overvalued.
The current stock price of $56.38 is trading 12.4% above its estimated GF Value™ of $50.18.
GuruFocus considers Federated Hermes to be Modestly Overvalued.
Key valuation signals for FHI:
Operating Margin %: 27.09% (near median its 10-year median of 29.16)
GF Value™: $50.18 vs. price of $56.38 (12.4% above fair value)
Industry Position: 61.9% above the Asset Management median (#264 of 656)
No single metric tells the full story. See the FHI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Federated Hermes provides asset management services for institutional and individual investors. The firm had $902.6 billion in managed assets at the end of 2025, composed of equity (11%), multi-asset (less than 1%), fixed-income (11%), alternative (2%), and money market (76%) funds. The firm's cash management operations are expected to generate around 55% of Federated's revenue this year, compared with 27%, 10%, and 8%, respectively, for the equity, fixed-income, and alternatives/multi-asset/other operations. The company's products are distributed via trust banks, wealth managers, and retail broker/dealers (68% of AUM), institutional investors (25%), and international clients (7%).
98GF Score
Get the complete analysis for FHI
Operating Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
FHI has been successfully added to your 
