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.
Mercia Asset Management Operating Margin % Related Terms
Mercia Asset Management Operating Margin % Historical Data
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The historical data trend for Mercia Asset Management'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.
LSE:MERC vs BLK, BX, KKR: Operating Margin % Comparison
For the Asset Management subindustry, Mercia Asset Management'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.
Mercia Asset Management Operating Margin % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, Mercia Asset Management's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Mercia Asset Management'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.
Mercia Asset Management'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.
Mercia Asset Management (LSE:MERC) has a Operating Margin % of 12.28% as of Sep. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on Mercia Asset Management and its competitors. According to the industry distribution chart, Mercia Asset Management ranks #356 out of 656 companies in the Asset Management industry, placing it in the top 54.3%.
Is Mercia Asset Management's Operating Margin % too high?
Mercia Asset Management's current Operating Margin % is 12.28%. The Asset Management industry median Operating Margin % is 17.00. Mercia Asset Management's value of 12.28% is 27.8% below this industry median. Based on the distribution chart, Mercia Asset Management ranks #356 out of 656 companies in the Asset Management industry, which is below the industry midpoint. Overall, Mercia Asset Management has a GF Score™ of 54/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Mercia Asset Management's Operating Margin % compare to BLK and BX?
According to the Asset Management industry distribution chart, Mercia Asset Management ranks #356 out of 656 companies for Operating Margin %. This places Mercia Asset Management in the lower half of its industry. The industry median Operating Margin % is 17.00. Mercia Asset Management's value of 12.28% is 27.8% 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 Asset Management company?
The median Operating Margin % among Asset Management companies is 17.00, 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. Mercia Asset Management's current Operating Margin % of 12.28% is 27.8% 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 Mercia Asset Management and its competitors. For the Asset Management industry, the median Operating Margin % is 17.00 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Mercia Asset Management's current Operating Margin % is 12.28%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Mercia Asset Management stock overvalued right now?
Based on GuruFocus' analysis, Mercia Asset Management (LSE:MERC) is currently considered Modestly Undervalued. The stock's GF Value™ is £0.36, compared to a current price of £0.29 — trading 20.1% below its estimated fair value. The current Operating Margin % is 12.28% and 27.8% below the Asset Management industry median of 17.00. Mercia Asset Management's overall GF Score™ is 54/100 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 Mercia Asset Management (LSE:MERC), the current Operating Margin % is 12.28% as of Sep. 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 Mercia Asset Management (LSE:MERC) Overvalued in 2026?
Based on GuruFocus' analysis, Mercia Asset Management stock appears to be undervalued.
The current stock price of £0.29 is trading 20.1% below its estimated GF Value™ of £0.36.
GuruFocus considers Mercia Asset Management to be Modestly Undervalued.
Key valuation signals for LSE:MERC:
Operating Margin %: 12.28%
GF Value™: £0.36 vs. price of £0.29 (20.1% below fair value)
Industry Position: 27.8% below the Asset Management median (#356 of 656)
No single metric tells the full story. See the LSE:MERC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Mercia Asset Management PLC is a specialist asset manager focusing on supporting regional SMEs. The company provides capital across its four asset classes proprietary balance sheet capital, venture capital, private equity, and debt. The company initially nurtures businesses via its third-party funds under management and then, over time, provides further funding to the companies by deploying direct investment follow-on capital from its balance sheet. It has more than eight offices in the UK region, approx. 20 university partnerships and extensive personal networks, providing it with access to high-quality deal flow.
54GF Score
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