McGrath RentCorpMGRC +1.17%90 Operating Margin % is 21.86% as of Mar. 2026, which is 7% below its 10-year median of 23.41. GuruFocus rates MGRC with a GF Score™ of 90/100 and a GF Value™ of $122.13 (Fairly Valued). The stock has 5 warning signs investors should review. Among 1,070 Business Services companies, McGrath RentCorp ranks better than 92.06% 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.
McGrath RentCorp Operating Margin % Related Terms
McGrath RentCorp Operating Margin % Historical Data
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The historical data trend for McGrath RentCorp'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.
MGRC vs CTOS, HTZ, VSTS: Operating Margin % Comparison
For the Rental & Leasing Services subindustry, McGrath RentCorp'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.
McGrath RentCorp Operating Margin % vs Business Services Industry
For the Business Services industry and Industrials sector, McGrath RentCorp's Operating Margin % distribution charts can be found below:
* The bar in red indicates where McGrath RentCorp'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.
McGrath RentCorp'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.
McGrath RentCorp (MGRC) has a Operating Margin % of 21.86% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on McGrath RentCorp and its competitors. This is near median its historical median of 23.41. Over the past decade, McGrath RentCorp's Operating Margin % has ranged from 18.69 to 26.81. According to the industry distribution chart, McGrath RentCorp ranks #85 out of 1070 companies in the Business Services industry, placing it in the top 7.9%.
Is McGrath RentCorp's Operating Margin % too high?
McGrath RentCorp's current Operating Margin % of 21.86% is near median its 10-year median of 23.41. Over the past 10 years, this metric has ranged from a low of 18.69 to a high of 26.81. The Business Services industry median Operating Margin % is 6.33. McGrath RentCorp's value of 21.86% is 245.3% above this industry median. Based on the distribution chart, McGrath RentCorp ranks #85 out of 1070 companies in the Business Services industry, which is in the top quartile — a strong position relative to peers. Overall, McGrath RentCorp has a GF Score™ of 90/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does McGrath RentCorp's Operating Margin % compare to CTOS and HTZ?
According to the Business Services industry distribution chart, McGrath RentCorp ranks #85 out of 1070 companies for Operating Margin %. This places McGrath RentCorp in the top 8% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 6.33. McGrath RentCorp's value of 21.86% is 245.3% above this benchmark. Historically, McGrath RentCorp's own Operating Margin % has ranged from 18.69 to 26.81 over the past decade. While the company's 10-year median is 23.41 vs. the industry median of 6.33, McGrath RentCorp 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 Business Services company?
The median Operating Margin % among Business Services companies is 6.33, based on 1,070 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. McGrath RentCorp's current Operating Margin % of 21.86% is 245.3% 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 McGrath RentCorp and its competitors. For the Business Services industry, the median Operating Margin % is 6.33 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. McGrath RentCorp's current Operating Margin % is 21.86%, which is near median its own 10-year median of 23.41. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is McGrath RentCorp stock overvalued right now?
Based on GuruFocus' analysis, McGrath RentCorp (MGRC) is currently considered Fairly Valued. The stock's GF Value™ is $122.13, compared to a current price of $123.22 — trading 0.9% above its estimated fair value. The current Operating Margin % is 21.86%, which is near median its 10-year median of 23.41 and 245.3% above the Business Services industry median of 6.33. McGrath RentCorp's overall GF Score™ is 90/100 with 5 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 McGrath RentCorp (MGRC), the current Operating Margin % is 21.86% 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 McGrath RentCorp (MGRC) Overvalued in 2026?
Based on GuruFocus' analysis, McGrath RentCorp stock appears to be overvalued.
The current stock price of $123.22 is trading 0.9% above its estimated GF Value™ of $122.13.
GuruFocus considers McGrath RentCorp to be Fairly Valued.
Key valuation signals for MGRC:
Operating Margin %: 21.86% (near median its 10-year median of 23.41)
GF Value™: $122.13 vs. price of $123.22 (0.9% above fair value)
Industry Position: 245.3% above the Business Services median (#85 of 1070)
No single metric tells the full story. See the MGRC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
McGrath RentCorp is a diversified business-to-business rental company with three rental divisions: relocatable modular buildings, portable storage containers, and electronic test equipment. It comprises four reportable business segments, namely the Modular Building segment (Mobile Modular), which generates maximum revenue; the Portable Storage segment (Portable Storage); the Electronic Test Equipment segment (TRS-RenTelco); and its classroom manufacturing business (Enviroplex), which sells modular buildings used as classrooms in California. The company generates its revenues mainly from the rental of its equipment under operating leases, with sales of equipment occurring in the normal course of business.
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