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.
Melrose Industries Operating Margin % Related Terms
Melrose Industries Operating Margin % Historical Data
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The historical data trend for Melrose Industries'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.
MLSPF vs GEV, ETN, PH: Operating Margin % Comparison
For the Specialty Industrial Machinery subindustry, Melrose Industries'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.
Melrose Industries Operating Margin % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Melrose Industries's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Melrose Industries'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.
Melrose Industries'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.
Melrose Industries (MLSPF) has a Operating Margin % of 8.51% as of Dec. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on Melrose Industries and its competitors. According to the industry distribution chart, Melrose Industries ranks #414 out of 3038 companies in the Industrial Products industry, placing it in the top 13.6%.
Is Melrose Industries' Operating Margin % too high?
Melrose Industries' current Operating Margin % is 8.51%. The Industrial Products industry median Operating Margin % is 6.53. Melrose Industries' value of 8.51% is 30.3% above this industry median. Based on the distribution chart, Melrose Industries ranks #414 out of 3038 companies in the Industrial Products industry, which is in the top quartile — a strong position relative to peers. Overall, Melrose Industries has a GF Score™ of 69/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Melrose Industries' Operating Margin % compare to GEV and ETN?
According to the Industrial Products industry distribution chart, Melrose Industries ranks #414 out of 3038 companies for Operating Margin %. This places Melrose Industries in the top 14% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 6.53. Melrose Industries' value of 8.51% is 30.3% above 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 6.53, based on 3,038 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. Melrose Industries's current Operating Margin % of 8.51% is 30.3% 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 Melrose Industries and its competitors. For the Industrial Products industry, the median Operating Margin % is 6.53 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Melrose Industries's current Operating Margin % is 8.51%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Melrose Industries stock overvalued right now?
Based on GuruFocus' analysis, Melrose Industries (MLSPF) is currently considered Modestly Undervalued. The stock's GF Value™ is $8.42, compared to a current price of $6.18 — trading 26.6% below its estimated fair value. The current Operating Margin % is 8.51% and 30.3% above the Industrial Products industry median of 6.53. Melrose Industries' overall GF Score™ is 69/100 with 6 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 Melrose Industries (MLSPF), the current Operating Margin % is 8.51% as of Dec. 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 Melrose Industries (MLSPF) Overvalued in 2026?
Based on GuruFocus' analysis, Melrose Industries stock appears to be undervalued.
The current stock price of $6.18 is trading 26.6% below its estimated GF Value™ of $8.42.
GuruFocus considers Melrose Industries to be Modestly Undervalued.
Key valuation signals for MLSPF:
Operating Margin %: 8.51%
GF Value™: $8.42 vs. price of $6.18 (26.6% below fair value)
Industry Position: 30.3% above the Industrial Products median (#414 of 3038)
No single metric tells the full story. See the MLSPF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Melrose Industries is a UK-based company that manufactures engines and structures products for all major OEMs across civil and defense markets. The company employs 13,032 people and generates approximately 75% of its revenue from the civil market, manufacturing engines and structures for major OEMs in both civil and defense sectors.In the civil market, the company operates in 90% of existing fleets in service and is a demonstrator partner in the GTF and CFM RISE next-generation engines for narrow-body aircraft.
69GF 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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