TransDigm GroupTDG -0.34%89 Operating Margin % is 46.66% as of Mar. 2026, which is 12% above its 10-year median of 41.56. GuruFocus rates TDG with a GF Score™ of 89/100 and a GF Value™ of $1,595.02 (Modestly Undervalued). The stock has 5 warning signs investors should review. Among 347 Aerospace & Defense companies, TransDigm Group ranks better than 97.98% on this metric.
TransDigm Group (NYSE:TDG) 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.
TransDigm Group Operating Margin % Related Terms
TransDigm Group Operating Margin % Historical Data
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The historical data trend for TransDigm Group'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.
TDG vs NOC, HONAV, GD: Operating Margin % Comparison
For the Aerospace & Defense subindustry, TransDigm Group'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.
TransDigm Group Operating Margin % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, TransDigm Group's Operating Margin % distribution charts can be found below:
* The bar in red indicates where TransDigm Group'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.
TransDigm Group's Operating Margin % for the fiscal year that ended in Sep. 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.
TransDigm Group (TDG) has a Operating Margin % of 46.66% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on TransDigm Group and its competitors. This is 12% above median its historical median of 41.56. Over the past decade, TransDigm Group's Operating Margin % has ranged from 34.31 to 47.44. According to the industry distribution chart, TransDigm Group ranks #7 out of 347 companies in the Aerospace & Defense industry, placing it in the top 2%.
Is TransDigm Group's Operating Margin % too high?
TransDigm Group's current Operating Margin % of 46.66% is 12% above median its 10-year median of 41.56. Over the past 10 years, this metric has ranged from a low of 34.31 to a high of 47.44. The Aerospace & Defense industry median Operating Margin % is 7.75. TransDigm Group's value of 46.66% is 502.1% above this industry median. Based on the distribution chart, TransDigm Group ranks #7 out of 347 companies in the Aerospace & Defense industry, which is in the top quartile — a strong position relative to peers. Overall, TransDigm Group has a GF Score™ of 89/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does TransDigm Group's Operating Margin % compare to NOC and HONAV?
According to the Aerospace & Defense industry distribution chart, TransDigm Group ranks #7 out of 347 companies for Operating Margin %. This places TransDigm Group in the top 2% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 7.75. TransDigm Group's value of 46.66% is 502.1% above this benchmark. Historically, TransDigm Group's own Operating Margin % has ranged from 34.31 to 47.44 over the past decade. While the company's 10-year median is 41.56 vs. the industry median of 7.75, TransDigm Group 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 an Aerospace & Defense company?
The median Operating Margin % among Aerospace & Defense companies is 7.75, based on 347 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. TransDigm Group's current Operating Margin % of 46.66% is 502.1% 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 TransDigm Group and its competitors. For the Aerospace & Defense industry, the median Operating Margin % is 7.75 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. TransDigm Group's current Operating Margin % is 46.66%, which is 12% above median its own 10-year median of 41.56. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is TransDigm Group stock overvalued right now?
Based on GuruFocus' analysis, TransDigm Group (TDG) is currently considered Modestly Undervalued. The stock's GF Value™ is $1,595.02, compared to a current price of $1,291.35 — trading 19% below its estimated fair value. The current Operating Margin % is 46.66%, which is 12% above median its 10-year median of 41.56 and 502.1% above the Aerospace & Defense industry median of 7.75. TransDigm Group's overall GF Score™ is 89/100 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 TransDigm Group (TDG), the current Operating Margin % is 46.66% 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 TransDigm Group (TDG) Overvalued in 2026?
Based on GuruFocus' analysis, TransDigm Group stock appears to be undervalued.
The current stock price of $1,291.35 is trading 19% below its estimated GF Value™ of $1,595.02.
GuruFocus considers TransDigm Group to be Modestly Undervalued.
Key valuation signals for TDG:
Operating Margin %: 46.66% (12% above median its 10-year median of 41.56)
GF Value™: $1,595.02 vs. price of $1,291.35 (19% below fair value)
Industry Position: 502.1% above the Aerospace & Defense median (#7 of 347)
No single metric tells the full story. See the TDG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
TransDigm manufactures and services a broad set of specialized parts for commercial and military aircraft. The firm organizes itself in three segments: power and control, airframes, and a small non-aviation segment, which serves mostly off-road vehicles and mining equipment. It operates as an acquisitive holding company that focuses on buying up smaller firms that make proprietary aerospace products with substantial aftermarket demand. TransDigm regularly employs financial leverage to amplify its operating results.
89GF Score
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