Nippon Paper Industries Co (TSE:3863) 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.
Nippon Paper Industries Co Operating Margin % Related Terms
Nippon Paper Industries 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.
Nippon Paper Industries Co Operating Margin % Chart
Nippon Paper Industries Co Operating Margin % Competitor Comparison
For the Paper & Paper Products subindustry, Nippon Paper Industries 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.
Nippon Paper Industries Co Operating Margin % vs Forest Products Industry
For the Forest Products industry and Basic Materials sector, Nippon Paper Industries Co's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Nippon Paper Industries Co's Operating Margin % falls into.
Nippon Paper Industries 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.
Nippon Paper Industries 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.
Nippon Paper Industries Co (TSE:3863) has a Operating Margin % of 3.35% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Nippon Paper Industries Co and its competitors. This is 90% above median its historical median of 1.76. According to the industry distribution chart, Nippon Paper Industries Co ranks #150 out of 283 companies in the Forest Products industry, placing it in the top 53%.
Is Nippon Paper Industries Co's Operating Margin % too high?
Nippon Paper Industries Co's current Operating Margin % of 3.35% is 90% above median its 10-year median of 1.76. The Forest Products industry median Operating Margin % is 2.60. Nippon Paper Industries Co's value of 3.35% is 28.8% above this industry median. Based on the distribution chart, Nippon Paper Industries Co ranks #150 out of 283 companies in the Forest Products industry, which is below the industry midpoint. Overall, Nippon Paper Industries Co has a GF Score™ of 61/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Nippon Paper Industries Co's Operating Margin % compare to competitors?
According to the Forest Products industry distribution chart, Nippon Paper Industries Co ranks #150 out of 283 companies for Operating Margin %. This places Nippon Paper Industries Co in the lower half of its industry. The industry median Operating Margin % is 2.60. Nippon Paper Industries Co's value of 3.35% is 28.8% above this benchmark. While the company's 10-year median is 1.76 vs. the industry median of 2.60, Nippon Paper Industries 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 Forest Products company?
The median Operating Margin % among Forest Products companies is 2.60, based on 283 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. Nippon Paper Industries Co's current Operating Margin % of 3.35% is 28.8% 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 Nippon Paper Industries Co and its competitors. For the Forest Products industry, the median Operating Margin % is 2.60 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Nippon Paper Industries Co's current Operating Margin % is 3.35%, which is 90% above median its own 10-year median of 1.76. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Nippon Paper Industries Co stock overvalued right now?
Based on GuruFocus' analysis, Nippon Paper Industries Co (TSE:3863) is currently considered Fairly Valued. The stock's GF Value™ is 円1,145.23, compared to a current price of 円1,246.00 — trading 8.8% above its estimated fair value. The current Operating Margin % is 3.35%, which is 90% above median its 10-year median of 1.76 and 28.8% above the Forest Products industry median of 2.60. Nippon Paper Industries Co's overall GF Score™ is 61/100 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 Nippon Paper Industries Co (TSE:3863), the current Operating Margin % is 3.35% 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 Nippon Paper Industries Co (TSE:3863) Overvalued in 2026?
Based on GuruFocus' analysis, Nippon Paper Industries Co stock appears to be overvalued.
The current stock price of 円1,246.00 is trading 8.8% above its estimated GF Value™ of 円1,145.23.
GuruFocus considers Nippon Paper Industries Co to be Fairly Valued.
Key valuation signals for TSE:3863:
Operating Margin %: 3.35% (90% above median its 10-year median of 1.76)
GF Value™: 円1,145.23 vs. price of 円1,246.00 (8.8% above fair value)
Industry Position: 28.8% above the Forest Products median (#150 of 283)
No single metric tells the full story. See the TSE:3863 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Nippon Paper Industries Co Ltd produces and sells a variety of paper products. The company's paper products include newsprint, printing, sanitary, and packaging paper, as well as container board and boxes. The firm also sells construction materials, and generates electric power. Nippon Paper organizes itself into four segments based on product type: pulp and paper; paper related; wood products and construction related; and other. The pulp and paper segment generates the majority of revenue. The majority of sales are made in Japan.
61GF Score
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