Encourage Technologies CoTSE:3682 75 Operating Margin % is 12.73% as of Mar. 2026, which is 3% above its 10-year median of 12.34. GuruFocus rates TSE:3682 with a GF Score™ of 75/100 and a GF Value™ of 円640.96 (Fairly Valued). The stock has 4 warning signs investors should review. Among 2,813 Software companies, Encourage Technologies Co ranks better than 73.59% on this metric.
Encourage Technologies Co (TSE:3682) 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.
Encourage Technologies Co Operating Margin % Related Terms
Encourage Technologies Co 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.
Encourage Technologies Co Operating Margin % Chart
TSE:3682 vs IBM, ACN, FISV: Operating Margin % Comparison
For the Information Technology Services subindustry, Encourage Technologies Co'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.
Encourage Technologies Co Operating Margin % vs Software Industry
For the Software industry and Technology sector, Encourage Technologies Co's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Encourage Technologies Co's Operating Margin % falls into.
Encourage Technologies Co 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.
Encourage Technologies Co's Operating Margin % for the fiscal year that ended in Mar. 2026 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.
Encourage Technologies Co (TSE:3682) has a Operating Margin % of 12.73% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Encourage Technologies Co and its competitors. This is near median its historical median of 12.34. Over the past decade, Encourage Technologies Co's Operating Margin % has ranged from 9.07 to 25.20. According to the industry distribution chart, Encourage Technologies Co ranks #743 out of 2813 companies in the Software industry, placing it in the top 26.4%.
Is Encourage Technologies Co's Operating Margin % too high?
Encourage Technologies Co's current Operating Margin % of 12.73% is near median its 10-year median of 12.34. Over the past 10 years, this metric has ranged from a low of 9.07 to a high of 25.20. The Software industry median Operating Margin % is 3.88. Encourage Technologies Co's value of 12.73% is 228.1% above this industry median. Based on the distribution chart, Encourage Technologies Co ranks #743 out of 2813 companies in the Software industry, which is above the industry midpoint. Overall, Encourage Technologies Co has a GF Score™ of 75/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Encourage Technologies Co's Operating Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Encourage Technologies Co ranks #743 out of 2813 companies for Operating Margin %. This puts Encourage Technologies Co in the upper half of its industry. The industry median Operating Margin % is 3.88. Encourage Technologies Co's value of 12.73% is 228.1% above this benchmark. Historically, Encourage Technologies Co's own Operating Margin % has ranged from 9.07 to 25.20 over the past decade. While the company's 10-year median is 12.34 vs. the industry median of 3.88, Encourage Technologies Co 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 Software company?
The median Operating Margin % among Software companies is 3.88, based on 2,813 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. Encourage Technologies Co's current Operating Margin % of 12.73% is 228.1% 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 Encourage Technologies Co and its competitors. For the Software industry, the median Operating Margin % is 3.88 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Encourage Technologies Co's current Operating Margin % is 12.73%, which is near median its own 10-year median of 12.34. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Encourage Technologies Co stock overvalued right now?
Based on GuruFocus' analysis, Encourage Technologies Co (TSE:3682) is currently considered Fairly Valued. The stock's GF Value™ is 円640.96, compared to a current price of 円600.00 — trading 6.4% below its estimated fair value. The current Operating Margin % is 12.73%, which is near median its 10-year median of 12.34 and 228.1% above the Software industry median of 3.88. Encourage Technologies Co's overall GF Score™ is 75/100 with 4 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 Encourage Technologies Co (TSE:3682), the current Operating Margin % is 12.73% 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 Encourage Technologies Co (TSE:3682) Overvalued in 2026?
Based on GuruFocus' analysis, Encourage Technologies Co stock appears to be undervalued.
The current stock price of 円600.00 is trading 6.4% below its estimated GF Value™ of 円640.96.
GuruFocus considers Encourage Technologies Co to be Fairly Valued.
Key valuation signals for TSE:3682:
Operating Margin %: 12.73% (near median its 10-year median of 12.34)
GF Value™: 円640.96 vs. price of 円600.00 (6.4% below fair value)
Industry Position: 228.1% above the Software median (#743 of 2813)
No single metric tells the full story. See the TSE:3682 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Encourage Technologies Co Ltd develops software that monitors and audits user activity in IT systems. The company also provides maintenance support after the installation of the software as well consulting services.
75GF Score
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