VTech HoldingsFRA:VTCB +1.79%78 Operating Margin % is 7.81% as of Mar. 2026, which is 12% below its 10-year median of 8.92. GuruFocus rates FRA:VTCB with a GF Score™ of 78/100 and a GF Value™ of €5.61 (Fairly Valued). The stock has 3 warning signs investors should review. Among 2,472 Hardware companies, VTech Holdings ranks better than 70.06% 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.
VTech Holdings Operating Margin % Related Terms
VTech Holdings Operating Margin % Historical Data
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The historical data trend for VTech Holdings'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:VTCB vs CSCO, CIEN, MSI: Operating Margin % Comparison
For the Communication Equipment subindustry, VTech Holdings'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.
VTech Holdings Operating Margin % vs Hardware Industry
For the Hardware industry and Technology sector, VTech Holdings's Operating Margin % distribution charts can be found below:
* The bar in red indicates where VTech Holdings'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.
VTech Holdings's Operating Margin % for the fiscal year that ended in Mar. 2026 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.
VTech Holdings (FRA:VTCB) has a Operating Margin % of 7.81% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on VTech Holdings and its competitors. This is 12% below median its historical median of 8.92. Over the past decade, VTech Holdings' Operating Margin % has ranged from 8.07 to 11.04. According to the industry distribution chart, VTech Holdings ranks #740 out of 2472 companies in the Hardware industry, placing it in the top 29.9%.
Is VTech Holdings' Operating Margin % too high?
VTech Holdings' current Operating Margin % of 7.81% is 12% below median its 10-year median of 8.92. Over the past 10 years, this metric has ranged from a low of 8.07 to a high of 11.04. The Hardware industry median Operating Margin % is 3.80. VTech Holdings' value of 7.81% is 105.5% above this industry median. Based on the distribution chart, VTech Holdings ranks #740 out of 2472 companies in the Hardware industry, which is above the industry midpoint. Overall, VTech Holdings has a GF Score™ of 78/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does VTech Holdings' Operating Margin % compare to CSCO and CIEN?
According to the Hardware industry distribution chart, VTech Holdings ranks #740 out of 2472 companies for Operating Margin %. This puts VTech Holdings in the upper half of its industry. The industry median Operating Margin % is 3.80. VTech Holdings' value of 7.81% is 105.5% above this benchmark. Historically, VTech Holdings' own Operating Margin % has ranged from 8.07 to 11.04 over the past decade. While the company's 10-year median is 8.92 vs. the industry median of 3.80, VTech Holdings 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 Hardware company?
The median Operating Margin % among Hardware companies is 3.80, based on 2,472 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. VTech Holdings's current Operating Margin % of 7.81% is 105.5% 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 VTech Holdings and its competitors. For the Hardware industry, the median Operating Margin % is 3.80 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. VTech Holdings's current Operating Margin % is 7.81%, which is 12% below median its own 10-year median of 8.92. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is VTech Holdings stock overvalued right now?
Based on GuruFocus' analysis, VTech Holdings (FRA:VTCB) is currently considered Fairly Valued. The stock's GF Value™ is €5.61, compared to a current price of €5.70 — trading 1.6% above its estimated fair value. The current Operating Margin % is 7.81%, which is 12% below median its 10-year median of 8.92 and 105.5% above the Hardware industry median of 3.80. VTech Holdings' overall GF Score™ is 78/100 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 VTech Holdings (FRA:VTCB), the current Operating Margin % is 7.81% 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 VTech Holdings (FRA:VTCB) Overvalued in 2026?
Based on GuruFocus' analysis, VTech Holdings stock appears to be overvalued.
The current stock price of €5.70 is trading 1.6% above its estimated GF Value™ of €5.61.
GuruFocus considers VTech Holdings to be Fairly Valued.
Key valuation signals for FRA:VTCB:
Operating Margin %: 7.81% (12% below median its 10-year median of 8.92)
GF Value™: €5.61 vs. price of €5.70 (1.6% above fair value)
Industry Position: 105.5% above the Hardware median (#740 of 2472)
No single metric tells the full story. See the FRA:VTCB stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
VTech Holdings Ltd is engaged in the designing, manufacturing, and distribution of consumer electronic products. It also provides contract manufacturing services. The company's diverse collection of products includes Telephone Products, Business Phones, Electronic Learning Toys, Baby Monitors, and Hospitality Products. In addition, it offers turnkey services to customers in several product categories. The company operates through four reportable segments: North America, (including the United States and Canada), Europe, Asia Pacific, and Others, which covers sales of electronic products to the rest of the world. It generates maximum revenue from Europe.
78GF Score
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