PepsiCoXTER:PEP +0.23%86 Operating Margin % is 16.53% as of Mar. 2026, which is 15% above its 10-year median of 14.37. GuruFocus rates XTER:PEP with a GF Score™ of 86/100 and a GF Value™ of €151.19 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 116 Beverages - Non-Alcoholic companies, PepsiCo ranks better than 70.69% on this metric.
Operating Margin % is calculated as Operating Income divided by its Revenue. PepsiCo's Operating Income for the
three
months ended in Mar. 2026 was €2,779 Mil. PepsiCo's Revenue for the
three
months ended in Mar. 2026 was €16,818 Mil. Therefore, PepsiCo's Operating Margin % for the quarter that ended in Mar. 2026 was 16.53%.
Good Sign:
PepsiCo Inc operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for PepsiCo's Operating Margin % or its related term are showing as below:
XTER:PEP'
s Operating Margin % Range Over the Past 10 Years
Min: 13.15 Med: 14.37 Max: 16.18
Current: 14.79
XTER:PEP's Operating Margin % is ranked better than 70.69% of 116
companies
in the Beverages - Non-Alcoholic industry
Industry Median: 8.975
vs XTER:PEP: 14.79
PepsiCo's 5-Year Average Operating Margin % Growth Rate was 0.20% per year.
PepsiCo's Operating Income for the
three
months ended in Mar. 2026 was €2,779 Mil.
Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 was €12,135 Mil.
PepsiCo (XTER:PEP) 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.
PepsiCo Operating Margin % Related Terms
PepsiCo Operating Margin % Historical Data
* Premium members only.
The historical data trend for PepsiCo'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.
XTER:PEP vs MNST, KO, KDP: Operating Margin % Comparison
For the Beverages - Non-Alcoholic subindustry, PepsiCo'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.
PepsiCo Operating Margin % vs Beverages - Non-Alcoholic Industry
For the Beverages - Non-Alcoholic industry and Consumer Defensive sector, PepsiCo's Operating Margin % distribution charts can be found below:
* The bar in red indicates where PepsiCo'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.
PepsiCo's Operating Margin % for the fiscal year that ended in Dec. 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.
PepsiCo (XTER:PEP) has a Operating Margin % of 16.53% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on PepsiCo and its competitors. This is 15% above median its historical median of 14.37. Over the past decade, PepsiCo's Operating Margin % has ranged from 13.15 to 16.18. According to the industry distribution chart, PepsiCo ranks #34 out of 116 companies in the Beverages - Non-Alcoholic industry, placing it in the top 29.3%.
Is PepsiCo's Operating Margin % too high?
PepsiCo's current Operating Margin % of 16.53% is 15% above median its 10-year median of 14.37. Over the past 10 years, this metric has ranged from a low of 13.15 to a high of 16.18. The Beverages - Non-Alcoholic industry median Operating Margin % is 8.98. PepsiCo's value of 16.53% is 84.2% above this industry median. Based on the distribution chart, PepsiCo ranks #34 out of 116 companies in the Beverages - Non-Alcoholic industry, which is above the industry midpoint. Overall, PepsiCo has a GF Score™ of 86/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does PepsiCo's Operating Margin % compare to MNST and KO?
According to the Beverages - Non-Alcoholic industry distribution chart, PepsiCo ranks #34 out of 116 companies for Operating Margin %. This puts PepsiCo in the upper half of its industry. The industry median Operating Margin % is 8.98. PepsiCo's value of 16.53% is 84.2% above this benchmark. Historically, PepsiCo's own Operating Margin % has ranged from 13.15 to 16.18 over the past decade. While the company's 10-year median is 14.37 vs. the industry median of 8.98, PepsiCo 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 Beverages - Non-Alcoholic company?
The median Operating Margin % among Beverages - Non-Alcoholic companies is 8.98, based on 116 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. PepsiCo's current Operating Margin % of 16.53% is 84.2% 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 PepsiCo and its competitors. For the Beverages - Non-Alcoholic industry, the median Operating Margin % is 8.98 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PepsiCo's current Operating Margin % is 16.53%, which is 15% above median its own 10-year median of 14.37. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is PepsiCo stock overvalued right now?
Based on GuruFocus' analysis, PepsiCo (XTER:PEP) is currently considered Modestly Undervalued. The stock's GF Value™ is €151.19, compared to a current price of €124.24 — trading 17.8% below its estimated fair value. The current Operating Margin % is 16.53%, which is 15% above median its 10-year median of 14.37 and 84.2% above the Beverages - Non-Alcoholic industry median of 8.98. PepsiCo's overall GF Score™ is 86/100 with 2 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 PepsiCo (XTER:PEP), the current Operating Margin % is 16.53% 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 PepsiCo (XTER:PEP) Overvalued in 2026?
Based on GuruFocus' analysis, PepsiCo stock appears to be undervalued.
The current stock price of €124.24 is trading 17.8% below its estimated GF Value™ of €151.19.
GuruFocus considers PepsiCo to be Modestly Undervalued.
Key valuation signals for XTER:PEP:
Operating Margin %: 16.53% (15% above median its 10-year median of 14.37)
GF Value™: €151.19 vs. price of €124.24 (17.8% below fair value)
Industry Position: 84.2% above the Beverages - Non-Alcoholic median (#34 of 116)
No single metric tells the full story. See the XTER:PEP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
PepsiCo is a global leader in snacks and beverages, owning well-known household brands including Pepsi, Mountain Dew, Gatorade, Lay's, Cheetos, and Doritos, among others. The company dominates the global savory snacks market and also ranks as the second-largest beverage provider in the world (behind Coca-Cola) with diversified exposure to carbonated soft drinks, or CSD, as well as water, sports, and energy drink offerings. Convenience foods account for approximately 58% of its total revenue, with beverages making up the rest. Pepsi owns the bulk of its manufacturing and distribution capacity in the US, but uses bottlers overseas for beverages. International markets made up 41% of total sales and 46% of operating profits before corporate expenses in 2025.
86GF Score
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