NTT Data Group (FRA:NT5) 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.
NTT Data Group Operating Margin % Related Terms
NTT Data Group Operating Margin % Historical Data
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The historical data trend for NTT Data Group'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.
FRA:NT5 vs FIS, FISV, LDOS: Operating Margin % Comparison
For the Information Technology Services subindustry, NTT Data Group'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.
NTT Data Group Operating Margin % vs Software Industry
For the Software industry and Technology sector, NTT Data Group's Operating Margin % distribution charts can be found below:
* The bar in red indicates where NTT Data Group'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.
NTT Data Group's Operating Margin % for the fiscal year that ended in Mar. 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.
NTT Data Group (FRA:NT5) has a Operating Margin % of 5.23% as of Jun. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on NTT Data Group and its competitors. This is 23% below median its historical median of 6.80. Over the past decade, NTT Data Group's Operating Margin % has ranged from 5.78 to 8.33.
Is NTT Data Group's Operating Margin % too high?
NTT Data Group's current Operating Margin % of 5.23% is 23% below median its 10-year median of 6.80. Over the past 10 years, this metric has ranged from a low of 5.78 to a high of 8.33. The Software industry median Operating Margin % is 3.87. NTT Data Group's value of 5.23% is 35.3% above this industry median. Overall, NTT Data Group has a GF Score™ of 13/100, reflecting its overall financial health beyond just this single metric.
How does NTT Data Group's Operating Margin % compare to FIS and FISV?
NTT Data Group's Operating Margin % of 5.23% can be compared against companies in the Software industry. The industry median Operating Margin % is 3.87. NTT Data Group's value of 5.23% is 35.3% above this benchmark. Historically, NTT Data Group's own Operating Margin % has ranged from 5.78 to 8.33 over the past decade. While the company's 10-year median is 6.80 vs. the industry median of 3.87, NTT Data Group 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 Software company?
The median Operating Margin % among Software companies is 3.87, based on 2,820 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. NTT Data Group's current Operating Margin % of 5.23% is 35.3% 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 NTT Data Group and its competitors. For the Software industry, the median Operating Margin % is 3.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. NTT Data Group's current Operating Margin % is 5.23%, which is 23% below median its own 10-year median of 6.80. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is NTT Data Group stock overvalued right now?
NTT Data Group (FRA:NT5) has a current Operating Margin % of 5.23%. The stock's GF Value™ is €15.10, compared to a current price of €21.57 — trading 42.8% above its estimated fair value. The current Operating Margin % is 5.23%, which is 23% below median its 10-year median of 6.80 and 35.3% above the Software industry median of 3.87. NTT Data Group's overall GF Score™ is 13/100 with 11 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 NTT Data Group (FRA:NT5), the current Operating Margin % is 5.23% as of Jun. 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 NTT Data Group (FRA:NT5) Overvalued in 2026?
Based on GuruFocus' analysis, NTT Data Group stock appears to be overvalued.
The current stock price of €21.57 is trading 42.8% above its estimated GF Value™ of €15.10.
Key valuation signals for FRA:NT5:
Operating Margin %: 5.23% (23% below median its 10-year median of 6.80)
GF Value™: €15.10 vs. price of €21.57 (42.8% above fair value)
Industry Position: 35.3% above the Software median
No single metric tells the full story. See the FRA:NT5 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
NTT Data Group Corp provides IT services to a wide range of business fields. It provides solutions in cloud, cybersecurity, data and analytics, Salesforce, SAP, ServiceNow, and application development and management, along with 5G-related services. The company also delivers consulting, sector-specific solutions, business process outsourcing, IT modernization, and managed service offerings.
13GF Score
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Operating Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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