Lennox InternationalLII +1.13%90 Operating Margin % is 14.63% as of Mar. 2026, which is 7% above its 10-year median of 13.67. GuruFocus rates LII with a GF Score™ of 90/100 and a GF Value™ of $538.41 (Fairly Valued). The stock has 4 warning signs investors should review. Among 1,762 Construction companies, Lennox International ranks better than 91.03% on this metric.
Lennox International (NYSE:LII) 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.
Lennox International Operating Margin % Related Terms
Lennox International Operating Margin % Historical Data
* Premium members only.
The historical data trend for Lennox International'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.
LII vs MAIR, MAS, CSL: Operating Margin % Comparison
For the Building Products & Equipment subindustry, Lennox International'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.
Lennox International Operating Margin % vs Construction Industry
For the Construction industry and Industrials sector, Lennox International's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Lennox International's Operating Margin % falls into.
Lennox International 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.
Lennox International'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.
Lennox International (LII) has a Operating Margin % of 14.63% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Lennox International and its competitors. This is near median its historical median of 13.67. Over the past decade, Lennox International's Operating Margin % has ranged from 12.49 to 20.27. According to the industry distribution chart, Lennox International ranks #158 out of 1762 companies in the Construction industry, placing it in the top 9%.
Is Lennox International's Operating Margin % too high?
Lennox International's current Operating Margin % of 14.63% is near median its 10-year median of 13.67. Over the past 10 years, this metric has ranged from a low of 12.49 to a high of 20.27. The Construction industry median Operating Margin % is 5.90. Lennox International's value of 14.63% is 148.2% above this industry median. Based on the distribution chart, Lennox International ranks #158 out of 1762 companies in the Construction industry, which is in the top quartile — a strong position relative to peers. Overall, Lennox International has a GF Score™ of 90/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Lennox International's Operating Margin % compare to MAIR and MAS?
According to the Construction industry distribution chart, Lennox International ranks #158 out of 1762 companies for Operating Margin %. This places Lennox International in the top 9% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 5.90. Lennox International's value of 14.63% is 148.2% above this benchmark. Historically, Lennox International's own Operating Margin % has ranged from 12.49 to 20.27 over the past decade. While the company's 10-year median is 13.67 vs. the industry median of 5.90, Lennox International 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 Construction company?
The median Operating Margin % among Construction companies is 5.90, based on 1,762 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. Lennox International's current Operating Margin % of 14.63% is 148.2% 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 Lennox International and its competitors. For the Construction industry, the median Operating Margin % is 5.90 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Lennox International's current Operating Margin % is 14.63%, which is near median its own 10-year median of 13.67. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Lennox International stock overvalued right now?
Based on GuruFocus' analysis, Lennox International (LII) is currently considered Fairly Valued. The stock's GF Value™ is $538.41, compared to a current price of $575.26 — trading 6.8% above its estimated fair value. The current Operating Margin % is 14.63%, which is near median its 10-year median of 13.67 and 148.2% above the Construction industry median of 5.90. Lennox International's overall GF Score™ is 90/100 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 Lennox International (LII), the current Operating Margin % is 14.63% 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 Lennox International (LII) Overvalued in 2026?
Based on GuruFocus' analysis, Lennox International stock appears to be overvalued.
The current stock price of $575.26 is trading 6.8% above its estimated GF Value™ of $538.41.
GuruFocus considers Lennox International to be Fairly Valued.
Key valuation signals for LII:
Operating Margin %: 14.63% (near median its 10-year median of 13.67)
GF Value™: $538.41 vs. price of $575.26 (6.8% above fair value)
Industry Position: 148.2% above the Construction median (#158 of 1762)
No single metric tells the full story. See the LII stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Lennox International manufacturers and distributes heating, ventilating, air conditioning, and refrigeration products for the North American replacement (75% of sales) and new construction (25% of sales) markets. Residential HVAC (home comfort solutions) accounts for 67% of sales and commercial HVAC (building climate solutions) accounts for the remaining 33% of sales. Lennox's commercial exposure is what its peers refer to as residential and light commercial, and lacks the scale and complexity of what is referred to as an applied solution. The company goes to market with multiple brands, but Lennox is its flagship HVAC brand.
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