H2O AmericaHTO +2.83%73 Operating Margin % is 20.42% as of Mar. 2026, which is 8% below its 10-year median of 22.23. GuruFocus rates HTO with a GF Score™ of 73/100 and a GF Value™ of $57.40 (Fairly Valued). The stock has 9 warning signs investors should review. Among 499 Utilities - Regulated companies, H2O America ranks better than 69.34% on this metric.
Operating Margin % is calculated as Operating Income divided by its Revenue. H2O America's Operating Income for the
three
months ended in Mar. 2026 was $37.4 Mil. H2O America's Revenue for the
three
months ended in Mar. 2026 was $183.3 Mil. Therefore, H2O America's Operating Margin % for the quarter that ended in Mar. 2026 was 20.42%.
Good Sign:
H2O America operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for H2O America's Operating Margin % or its related term are showing as below:
HTO'
s Operating Margin % Range Over the Past 10 Years
Min: 17.42 Med: 22.23 Max: 28.68
Current: 21.94
HTO's Operating Margin % is ranked better than 69.34% of 499
companies
in the Utilities - Regulated industry
Industry Median: 14.97
vs HTO: 21.94
H2O America's 5-Year Average Operating Margin % Growth Rate was 3.00% per year.
H2O America's Operating Income for the
three
months ended in Mar. 2026 was $37.4 Mil.
Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 was $179.1 Mil.
H2O America (NAS:HTO) 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.
H2O America Operating Margin % Related Terms
H2O America Operating Margin % Historical Data
* Premium members only.
The historical data trend for H2O America'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.
HTO vs CWT, AWR, MSEX: Operating Margin % Comparison
For the Utilities - Regulated Water subindustry, H2O America'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.
H2O America Operating Margin % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, H2O America's Operating Margin % distribution charts can be found below:
* The bar in red indicates where H2O America'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.
H2O America'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.
H2O America (HTO) has a Operating Margin % of 20.42% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on H2O America and its competitors. This is near median its historical median of 22.23. Over the past decade, H2O America's Operating Margin % has ranged from 17.42 to 28.68. According to the industry distribution chart, H2O America ranks #153 out of 499 companies in the Utilities - Regulated industry, placing it in the top 30.7%.
Is H2O America's Operating Margin % too high?
H2O America's current Operating Margin % of 20.42% is near median its 10-year median of 22.23. Over the past 10 years, this metric has ranged from a low of 17.42 to a high of 28.68. The Utilities - Regulated industry median Operating Margin % is 14.97. H2O America's value of 20.42% is 36.4% above this industry median. Based on the distribution chart, H2O America ranks #153 out of 499 companies in the Utilities - Regulated industry, which is above the industry midpoint. Overall, H2O America has a GF Score™ of 73/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does H2O America's Operating Margin % compare to CWT and AWR?
According to the Utilities - Regulated industry distribution chart, H2O America ranks #153 out of 499 companies for Operating Margin %. This puts H2O America in the upper half of its industry. The industry median Operating Margin % is 14.97. H2O America's value of 20.42% is 36.4% above this benchmark. Historically, H2O America's own Operating Margin % has ranged from 17.42 to 28.68 over the past decade. While the company's 10-year median is 22.23 vs. the industry median of 14.97, H2O America 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 Utilities - Regulated company?
The median Operating Margin % among Utilities - Regulated companies is 14.97, based on 499 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. H2O America's current Operating Margin % of 20.42% is 36.4% 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 H2O America and its competitors. For the Utilities - Regulated industry, the median Operating Margin % is 14.97 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. H2O America's current Operating Margin % is 20.42%, which is near median its own 10-year median of 22.23. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is H2O America stock overvalued right now?
Based on GuruFocus' analysis, H2O America (HTO) is currently considered Fairly Valued. The stock's GF Value™ is $57.40, compared to a current price of $59.16 — trading 3.1% above its estimated fair value. The current Operating Margin % is 20.42%, which is near median its 10-year median of 22.23 and 36.4% above the Utilities - Regulated industry median of 14.97. H2O America's overall GF Score™ is 73/100 with 9 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 H2O America (HTO), the current Operating Margin % is 20.42% 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 H2O America (HTO) Overvalued in 2026?
Based on GuruFocus' analysis, H2O America stock appears to be overvalued.
The current stock price of $59.16 is trading 3.1% above its estimated GF Value™ of $57.40.
GuruFocus considers H2O America to be Fairly Valued.
Key valuation signals for HTO:
Operating Margin %: 20.42% (near median its 10-year median of 22.23)
GF Value™: $57.40 vs. price of $59.16 (3.1% above fair value)
Industry Position: 36.4% above the Utilities - Regulated median (#153 of 499)
No single metric tells the full story. See the HTO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
H2O America is a national investor-owned network of local water and wastewater utilities united by one purpose: delivering clean, high-quality water to the communities it calls home. Across approximately 407,000 water and wastewater service connections, the company invests in critical infrastructure to strengthen the water supply for generations to come. Its single reportable segment provides water utility and utility-related services to its customers.
73GF Score
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