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.
Ztest Electronics Operating Margin % Related Terms
Ztest Electronics Operating Margin % Historical Data
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The historical data trend for Ztest Electronics'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.
ZTSTF vs APH, GLW, TEL: Operating Margin % Comparison
For the Electronic Components subindustry, Ztest Electronics'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.
Ztest Electronics Operating Margin % vs Hardware Industry
For the Hardware industry and Technology sector, Ztest Electronics's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Ztest Electronics'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.
Ztest Electronics's Operating Margin % for the fiscal year that ended in Jun. 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.
Ztest Electronics (ZTSTF) has a Operating Margin % of 21.38% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Ztest Electronics and its competitors. According to the industry distribution chart, Ztest Electronics ranks #206 out of 2476 companies in the Hardware industry, placing it in the top 8.3%.
Is Ztest Electronics' Operating Margin % too high?
Ztest Electronics' current Operating Margin % is 21.38%. The Hardware industry median Operating Margin % is 3.81. Ztest Electronics' value of 21.38% is 461.2% above this industry median. Based on the distribution chart, Ztest Electronics ranks #206 out of 2476 companies in the Hardware industry, which is in the top quartile — a strong position relative to peers. Overall, Ztest Electronics has a GF Score™ of 47/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Ztest Electronics' Operating Margin % compare to APH and GLW?
According to the Hardware industry distribution chart, Ztest Electronics ranks #206 out of 2476 companies for Operating Margin %. This places Ztest Electronics in the top 8% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 3.81. Ztest Electronics' value of 21.38% is 461.2% above this benchmark. 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 Hardware company?
The median Operating Margin % among Hardware companies is 3.81, based on 2,476 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. Ztest Electronics's current Operating Margin % of 21.38% is 461.2% 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 Ztest Electronics and its competitors. For the Hardware industry, the median Operating Margin % is 3.81 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Ztest Electronics's current Operating Margin % is 21.38%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Ztest Electronics stock overvalued right now?
Based on GuruFocus' analysis, Ztest Electronics (ZTSTF) is currently considered Significantly Overvalued. The stock's GF Value™ is $0.15, compared to a current price of $0.22 — trading 46.7% above its estimated fair value. The current Operating Margin % is 21.38% and 461.2% above the Hardware industry median of 3.81. Ztest Electronics' overall GF Score™ is 47/100 with 7 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 Ztest Electronics (ZTSTF), the current Operating Margin % is 21.38% 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 Ztest Electronics (ZTSTF) Overvalued in 2026?
Based on GuruFocus' analysis, Ztest Electronics stock appears to be overvalued.
The current stock price of $0.22 is trading 46.7% above its estimated GF Value™ of $0.15.
GuruFocus considers Ztest Electronics to be Significantly Overvalued.
Key valuation signals for ZTSTF:
Operating Margin %: 21.38%
GF Value™: $0.15 vs. price of $0.22 (46.7% above fair value)
Industry Position: 461.2% above the Hardware median (#206 of 2476)
No single metric tells the full story. See the ZTSTF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Ztest Electronics Inc is a Canada-based company. It is involved in the designing, developing, and assembling printed circuit boards and other electronic equipment. Geographically, the company operates only in Canada.
47GF Score
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