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.
Resources Connection Operating Margin % Related Terms
Resources Connection Operating Margin % Historical Data
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The historical data trend for Resources Connection'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.
STU:RCO vs FORR, GLAI, EUBG: Operating Margin % Comparison
For the Consulting Services subindustry, Resources Connection'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.
Resources Connection Operating Margin % vs Business Services Industry
For the Business Services industry and Industrials sector, Resources Connection's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Resources Connection'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.
Resources Connection's Operating Margin % for the fiscal year that ended in May. 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.
Resources Connection (STU:RCO) has a Operating Margin % of -7.73% as of Feb. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Resources Connection and its competitors. According to the industry distribution chart, Resources Connection ranks #870 out of 1068 companies in the Business Services industry, placing it in the top 81.5%.
Is Resources Connection's Operating Margin % too high?
Resources Connection's current Operating Margin % is -7.73%. Based on the distribution chart, Resources Connection ranks #870 out of 1068 companies in the Business Services industry, which is in the bottom quartile relative to peers. Overall, Resources Connection has a GF Score™ of 56/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Resources Connection's Operating Margin % compare to FORR and GLAI?
According to the Business Services industry distribution chart, Resources Connection ranks #870 out of 1068 companies for Operating Margin %. This places Resources Connection in the lower half of its industry. The industry median Operating Margin % is 6.30. 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 6.30, based on 1,068 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. 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 Resources Connection and its competitors. For the Business Services industry, the median Operating Margin % is 6.30 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Resources Connection's current Operating Margin % is -7.73%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Resources Connection stock overvalued right now?
Based on GuruFocus' analysis, Resources Connection (STU:RCO) is currently considered Possible Value Trap. The stock's GF Value™ is €5.71, compared to a current price of €3.96 — trading 30.6% below its estimated fair value. The current Operating Margin % is -7.73%. Resources Connection's overall GF Score™ is 56/100 with 8 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 Resources Connection (STU:RCO), the current Operating Margin % is -7.73% as of Feb. 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 Resources Connection (STU:RCO) Overvalued in 2026?
Based on GuruFocus' analysis, Resources Connection stock appears to be undervalued.
The current stock price of €3.96 is trading 30.6% below its estimated GF Value™ of €5.71.
GuruFocus considers Resources Connection to be Possible Value Trap.
Key valuation signals for STU:RCO:
Operating Margin %: -7.73%
GF Value™: €5.71 vs. price of €3.96 (30.6% below fair value)
No single metric tells the full story. See the STU:RCO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Resources Connection Inc provides consulting and business initiative support services predominantly through its operative subsidiary, Resources Global Professionals. It has two segments RGP ( Resources Global Professionals.) and Sitrick. The RGP segment is focused on delivering consulting services catering to its client's operational needs and change initiatives utilizing a combination of bench and on-demand, talent. The Sitrick segment provides corporate, financial, transactional, and crisis communication and management services. The company generates a majority of its revenue from the RGP segment. Geographically, it derives its key revenue from North America and the rest from Europe and the Asia Pacific region.
56GF Score
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