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.
Dell-VMWare Tracking Stock Operating Margin % Related Terms
Dell-VMWare Tracking Stock 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.
XTER:12D vs CA, CTXS, PAGS: Operating Margin % Comparison
For the Software - Infrastructure subindustry, Dell-VMWare Tracking Stock'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.
Dell-VMWare Tracking Stock Operating Margin % vs Software Industry
For the Software industry and Technology sector, Dell-VMWare Tracking Stock's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Dell-VMWare Tracking Stock'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.
Dell-VMWare Tracking Stock's Operating Margin % for the fiscal year that ended in Jan. 2018 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.
Dell-VMWare Tracking Stock (XTER:12D) has a Operating Margin % of 22.50% as of Oct. 2018. Operating margin is the ratio of total operating income to net sales. View historical data on Dell-VMWare Tracking Stock and its competitors. This is near median its historical median of 21.32. Over the past decade, Dell-VMWare Tracking Stock's Operating Margin % has ranged from 21.32 to 22.83.
Is Dell-VMWare Tracking Stock's Operating Margin % too high?
Dell-VMWare Tracking Stock's current Operating Margin % of 22.50% is near median its 10-year median of 21.32. Over the past 10 years, this metric has ranged from a low of 21.32 to a high of 22.83. The Software industry median Operating Margin % is 3.87. Dell-VMWare Tracking Stock's value of 22.50% is 482.1% above this industry median.
How does Dell-VMWare Tracking Stock's Operating Margin % compare to CA and CTXS?
Dell-VMWare Tracking Stock's Operating Margin % of 22.50% can be compared against companies in the Software industry. The industry median Operating Margin % is 3.87. Dell-VMWare Tracking Stock's value of 22.50% is 482.1% above this benchmark. Historically, Dell-VMWare Tracking Stock's own Operating Margin % has ranged from 21.32 to 22.83 over the past decade. While the company's 10-year median is 21.32 vs. the industry median of 3.87, Dell-VMWare Tracking Stock 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 3.87, based on 2,820 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. Dell-VMWare Tracking Stock's current Operating Margin % of 22.50% is 482.1% 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 Dell-VMWare Tracking Stock and its competitors. For the Software industry, the median Operating Margin % is 3.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Dell-VMWare Tracking Stock's current Operating Margin % is 22.50%, which is near median its own 10-year median of 21.32. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Dell-VMWare Tracking Stock stock overvalued right now?
Dell-VMWare Tracking Stock (XTER:12D) has a current Operating Margin % of 22.50%. The current Operating Margin % is 22.50%, which is near median its 10-year median of 21.32 and 482.1% above the Software industry median of 3.87. 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 Dell-VMWare Tracking Stock (XTER:12D), the current Operating Margin % is 22.50% as of Oct. 2018. 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.
Dell-VMWare Tracking Stock was incorporated in the state of Delaware on January 31, 2013 under the name of Denali Holding Inc. It changed its name to Dell Technologies Inc. on August 25, 2016. On September 7, 2016, a merger subsidiary of Dell Technologies merged with and into EMC Corporation, with EMC Corporation surviving the merger as a wholly-owned subsidiary of Dell Technologies. The company has issued a tracking stock to track the performance of a portion of Dell Technologies' economic interest in the VMware business. It is an information technology company. The company offers virtualization and cloud infrastructure solutions, which enable organizations to manage IT resources across complex multi-cloud, multi-device environments.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
XTER:12D has been successfully added to your 