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Plains All American Pipeline LP (NAS:PAA) 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 NokiaÂ’s 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.
Plains All American Pipeline LP Operating Margin % Related Terms
Plains All American Pipeline LP 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.
Plains All American Pipeline LP Operating Margin % Chart
PAA vs WES, DTM, AM: Operating Margin % Comparison
For the Oil & Gas Midstream subindustry, Plains All American Pipeline LP'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.
Plains All American Pipeline LP Operating Margin % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Plains All American Pipeline LP's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Plains All American Pipeline LP's Operating Margin % falls into.
Plains All American Pipeline LP 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.
* 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.
Plains All American Pipeline LP (PAA) has a Operating Margin % of 2.82% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Plains All American Pipeline LP and its competitors. This is 21% below median its historical median of 3.56. Over the past decade, Plains All American Pipeline LP's Operating Margin % has ranged from 2.10 to 6.35. According to the industry distribution chart, Plains All American Pipeline LP ranks #580 out of 918 companies in the Oil & Gas industry, placing it in the top 63.2%.
Is Plains All American Pipeline LP's Operating Margin % too high?
Plains All American Pipeline LP's current Operating Margin % of 2.82% is 21% below median its 10-year median of 3.56. Over the past 10 years, this metric has ranged from a low of 2.10 to a high of 6.35. The Oil & Gas industry median Operating Margin % is 7.11. Plains All American Pipeline LP's value of 2.82% is 60.3% below this industry median. Based on the distribution chart, Plains All American Pipeline LP ranks #580 out of 918 companies in the Oil & Gas industry, which is below the industry midpoint. Overall, Plains All American Pipeline LP has a GF Scoreâ„¢ of 73/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Plains All American Pipeline LP's Operating Margin % compare to WES and DTM?
According to the Oil & Gas industry distribution chart, Plains All American Pipeline LP ranks #580 out of 918 companies for Operating Margin %. This places Plains All American Pipeline LP in the lower half of its industry. The industry median Operating Margin % is 7.11. Plains All American Pipeline LP's value of 2.82% is 60.3% below this benchmark. Historically, Plains All American Pipeline LP's own Operating Margin % has ranged from 2.10 to 6.35 over the past decade. While the company's 10-year median is 3.56 vs. the industry median of 7.11, Plains All American Pipeline LP 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 an Oil & Gas company?
The median Operating Margin % among Oil & Gas companies is 7.11, based on 918 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. Plains All American Pipeline LP's current Operating Margin % of 2.82% is 60.3% 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 Plains All American Pipeline LP and its competitors. For the Oil & Gas industry, the median Operating Margin % is 7.11 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Plains All American Pipeline LP's current Operating Margin % is 2.82%, which is 21% below median its own 10-year median of 3.56. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Plains All American Pipeline LP stock overvalued right now?
Based on GuruFocus' analysis, Plains All American Pipeline LP (PAA) is currently considered Significantly Overvalued. The stock's GF Value™ is $17.29, compared to a current price of $24.82 — trading 43.6% above its estimated fair value. The current Operating Margin % is 2.82%, which is 21% below median its 10-year median of 3.56 and 60.3% below the Oil & Gas industry median of 7.11. Plains All American Pipeline LP's overall GF Score™ is 73/100 with 14 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 Plains All American Pipeline LP (PAA), the current Operating Margin % is 2.82% 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 Plains All American Pipeline LP (PAA) Overvalued in 2026?
Based on GuruFocus' analysis, Plains All American Pipeline LP stock appears to be overvalued.
The current stock price of $24.82 is trading 43.6% above its estimated GF Value™ of $17.29.
GuruFocus considers Plains All American Pipeline LP to be Significantly Overvalued.
Key valuation signals for PAA:
Operating Margin %: 2.82% (21% below median its 10-year median of 3.56)
GF Value™: $17.29 vs. price of $24.82 (43.6% above fair value)
Industry Position: 60.3% below the Oil & Gas median (#580 of 918)
No single metric tells the full story. See the PAA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Plains All American Pipeline LP, through its subsidiaries, engages in the pipeline transportation, terminaling, storage, and gathering of crude oil and natural gas liquids (NGL) in the United States and Canada. The company operates through two segments, Crude Oil and NGL. The Crude Oil segment offers gathering and transporting crude oil through pipelines, gathering systems, trucks, barges, or railcars. The NGL segment is involved in natural gas processing and NGL fractionation, storage, transportation, and terminalling. It generates the majority of its revenue from the Crude Oil segment.
73GF Score
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