Babcock International Group (MEX:BABBN) 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.
Babcock International Group Operating Margin % Related Terms
Babcock International Group Operating Margin % Historical Data
* 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.
Babcock International Group Operating Margin % Chart
MEX:BABBN vs PWR, FIX, EME: Operating Margin % Comparison
For the Engineering & Construction subindustry, Babcock International 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.
Babcock International Group Operating Margin % vs Construction Industry
For the Construction industry and Industrials sector, Babcock International Group's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Babcock International Group's Operating Margin % falls into.
Babcock International Group Operating Margin % Calculation
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.
Babcock International Group'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.
Babcock International Group (MEX:BABBN) has a Operating Margin % of 2.68% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Babcock International Group and its competitors. This is 44% below median its historical median of 4.82. According to the industry distribution chart, Babcock International Group ranks #883 out of 1767 companies in the Construction industry, placing it in the top 50%.
Is Babcock International Group's Operating Margin % too high?
Babcock International Group's current Operating Margin % of 2.68% is 44% below median its 10-year median of 4.82. The Construction industry median Operating Margin % is 5.89. Babcock International Group's value of 2.68% is 54.5% below this industry median. Based on the distribution chart, Babcock International Group ranks #883 out of 1767 companies in the Construction industry, which is above the industry midpoint. Overall, Babcock International Group has a GF Score™ of 67/100, reflecting its overall financial health beyond just this single metric.
How does Babcock International Group's Operating Margin % compare to PWR and FIX?
According to the Construction industry distribution chart, Babcock International Group ranks #883 out of 1767 companies for Operating Margin %. This puts Babcock International Group in the upper half of its industry. The industry median Operating Margin % is 5.89. Babcock International Group's value of 2.68% is 54.5% below this benchmark. While the company's 10-year median is 4.82 vs. the industry median of 5.89, Babcock International Group has consistently been below 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 Construction company?
The median Operating Margin % among Construction companies is 5.89, based on 1,767 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. Babcock International Group's current Operating Margin % of 2.68% is 54.5% 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 Babcock International Group and its competitors. For the Construction industry, the median Operating Margin % is 5.89 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Babcock International Group's current Operating Margin % is 2.68%, which is 44% below median its own 10-year median of 4.82. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Babcock International Group stock overvalued right now?
Babcock International Group (MEX:BABBN) has a current Operating Margin % of 2.68%. The stock's GF Value™ is MXN52.85, compared to a current price of MXN82.68 — trading 56.4% above its estimated fair value. The current Operating Margin % is 2.68%, which is 44% below median its 10-year median of 4.82 and 54.5% below the Construction industry median of 5.89. Babcock International Group's overall GF Score™ is 67/100 with 2 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 Babcock International Group (MEX:BABBN), the current Operating Margin % is 2.68% 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 Babcock International Group (MEX:BABBN) Overvalued in 2026?
Based on GuruFocus' analysis, Babcock International Group stock appears to be overvalued.
The current stock price of MXN82.68 is trading 56.4% above its estimated GF Value™ of MXN52.85.
Key valuation signals for MEX:BABBN:
Operating Margin %: 2.68% (44% below median its 10-year median of 4.82)
GF Value™: MXN52.85 vs. price of MXN82.68 (56.4% above fair value)
Industry Position: 54.5% below the Construction median (#883 of 1767)
No single metric tells the full story. See the MEX:BABBN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Babcock International Group PLC is a British engineering company specializing in the construction and decommissioning of nuclear power plants and submarines; maintenance support; fleet management for aviation, marine, and land; and provision of technical training and emergency services. The company's operating segments include Marine, Land, Aviation, and Nuclear. It generates maximum revenue from the Nuclear segment, which is engaged in providing engineering support to the United Kingdom's nuclear submarine fleet, decommissioning nuclear facilities, supporting nuclear generation, and new build projects. Geographically, it derives a majority of its revenue from the United Kingdom and also has a presence in the Rest of Europe, Africa, North America, Australasia, and the Rest of the World.
67GF Score
Get the complete analysis for MEX:BABBN
Operating Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
MEX:BABBN has been successfully added to your 
