Papa John's International (STU:PP1) 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.
Papa John's International Operating Margin % Related Terms
Papa John's International 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.
Papa John's International Operating Margin % Chart
STU:PP1 vs SG, BJRI, BH: Operating Margin % Comparison
For the Restaurants subindustry, Papa John's International'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.
Papa John's International Operating Margin % vs Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Papa John's International's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Papa John's International's Operating Margin % falls into.
Papa John's International 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.
Papa John's International'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.
Papa John's International (STU:PP1) has a Operating Margin % of 5.04% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Papa John's International and its competitors. This is 20% below median its historical median of 6.33. Over the past decade, Papa John's International's Operating Margin % has ranged from 1.22 to 9.00. According to the industry distribution chart, Papa John's International ranks #192 out of 365 companies in the Restaurants industry, placing it in the top 52.6%.
Is Papa John's International's Operating Margin % too high?
Papa John's International's current Operating Margin % of 5.04% is 20% below median its 10-year median of 6.33. Over the past 10 years, this metric has ranged from a low of 1.22 to a high of 9.00. The Restaurants industry median Operating Margin % is 4.26. Papa John's International's value of 5.04% is 18.3% above this industry median. Based on the distribution chart, Papa John's International ranks #192 out of 365 companies in the Restaurants industry, which is below the industry midpoint. Overall, Papa John's International has a GF Score™ of 71/100, reflecting its overall financial health beyond just this single metric.
How does Papa John's International's Operating Margin % compare to SG and BJRI?
According to the Restaurants industry distribution chart, Papa John's International ranks #192 out of 365 companies for Operating Margin %. This places Papa John's International in the lower half of its industry. The industry median Operating Margin % is 4.26. Papa John's International's value of 5.04% is 18.3% above this benchmark. Historically, Papa John's International's own Operating Margin % has ranged from 1.22 to 9.00 over the past decade. While the company's 10-year median is 6.33 vs. the industry median of 4.26, Papa John's International 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 Restaurants company?
The median Operating Margin % among Restaurants companies is 4.26, based on 365 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. Papa John's International's current Operating Margin % of 5.04% is 18.3% 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 Papa John's International and its competitors. For the Restaurants industry, the median Operating Margin % is 4.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Papa John's International's current Operating Margin % is 5.04%, which is 20% below median its own 10-year median of 6.33. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Papa John's International stock overvalued right now?
Papa John's International (STU:PP1) has a current Operating Margin % of 5.04%. The stock's GF Value™ is €39.86, compared to a current price of €30.80 — trading 22.7% below its estimated fair value. The current Operating Margin % is 5.04%, which is 20% below median its 10-year median of 6.33 and 18.3% above the Restaurants industry median of 4.26. Papa John's International's overall GF Score™ is 71/100 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 Papa John's International (STU:PP1), the current Operating Margin % is 5.04% 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 Papa John's International (STU:PP1) Overvalued in 2026?
Based on GuruFocus' analysis, Papa John's International stock appears to be undervalued.
The current stock price of €30.80 is trading 22.7% below its estimated GF Value™ of €39.86.
Key valuation signals for STU:PP1:
Operating Margin %: 5.04% (20% below median its 10-year median of 6.33)
GF Value™: €39.86 vs. price of €30.80 (22.7% below fair value)
Industry Position: 18.3% above the Restaurants median (#192 of 365)
No single metric tells the full story. See the STU:PP1 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Papa John's International Inc operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants. It has four defined reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International. The company derives maximum revenue from North America commissaries segment. The North America commissaries segment consists of the operations of its regional dough production and product distribution centers in the United States and Canada and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada.
71GF Score
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