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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.
Highway Holdings Operating Margin % Related Terms
Highway Holdings Operating Margin % Historical Data
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The historical data trend for Highway 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.
HIHO vs MTEN, OLOX, TRSG: Operating Margin % Comparison
For the Metal Fabrication subindustry, Highway 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.
Highway Holdings Operating Margin % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Highway Holdings's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Highway 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.
Highway 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.
Highway Holdings (HIHO) has a Operating Margin % of 2.95% as of Jun. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Highway Holdings and its competitors. According to the industry distribution chart, Highway Holdings ranks #2838 out of 3036 companies in the Industrial Products industry, placing it in the top 93.5%.
Is Highway Holdings' Operating Margin % too high?
Highway Holdings' current Operating Margin % is 2.95%. The Industrial Products industry median Operating Margin % is 6.50. Highway Holdings' value of 2.95% is 54.6% below this industry median. Based on the distribution chart, Highway Holdings ranks #2838 out of 3036 companies in the Industrial Products industry, which is in the bottom quartile relative to peers. Overall, Highway Holdings has a GF Score™ of 51/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Highway Holdings' Operating Margin % compare to MTEN and OLOX?
According to the Industrial Products industry distribution chart, Highway Holdings ranks #2838 out of 3036 companies for Operating Margin %. This places Highway Holdings in the lower half of its industry. The industry median Operating Margin % is 6.50. Highway Holdings' value of 2.95% is 54.6% below this benchmark. 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 Industrial Products company?
The median Operating Margin % among Industrial Products companies is 6.50, based on 3,036 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. Highway Holdings's current Operating Margin % of 2.95% is 54.6% 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 Highway Holdings and its competitors. For the Industrial Products industry, the median Operating Margin % is 6.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Highway Holdings's current Operating Margin % is 2.95%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Highway Holdings stock overvalued right now?
Based on GuruFocus' analysis, Highway Holdings (HIHO) is currently considered Fairly Valued. The stock's GF Value™ is $1.20, compared to a current price of $1.09 — trading 9.2% below its estimated fair value. The current Operating Margin % is 2.95% and 54.6% below the Industrial Products industry median of 6.50. Highway Holdings' overall GF Score™ is 51/100 with 4 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 Highway Holdings (HIHO), the current Operating Margin % is 2.95% as of Jun. 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 Highway Holdings (HIHO) Overvalued in 2026?
Based on GuruFocus' analysis, Highway Holdings stock appears to be undervalued.
The current stock price of $1.09 is trading 9.2% below its estimated GF Value™ of $1.20.
GuruFocus considers Highway Holdings to be Fairly Valued.
Key valuation signals for HIHO:
Operating Margin %: 2.95%
GF Value™: $1.20 vs. price of $1.09 (9.2% below fair value)
Industry Position: 54.6% below the Industrial Products median (#2838 of 3036)
No single metric tells the full story. See the HIHO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Highway Holdings Ltd is a holding company. Along with its subsidiaries, it operates as a fully integrated manufacturer of high-quality metal, plastic, electric and electronic components, subassemblies, and finished products for OEMs and contract manufacturers. The manufacturing services offered by the group include metal stamping, screen printing, plastic injection molding, pad printing, and electronic assembly of printed circuit boards. Its reportable business segments are metal stamping and mechanical OEM operations, which derive maximum revenue, and electric OEM operations. Geographically, the group generates maximum revenue from Europe, and the rest from North America, Hong Kong and China, and other Asian countries.
51GF 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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