Operating margin: what it is and how to read it
Operating margin is what is left of each sale after paying all business expenses (staff, rent, marketing, research…) but before interest and taxes. It measures the profitability of the business itself.
How it is calculated
Operating margin = operating profit (EBIT) / revenue.
How to read it
Above 15% usually means a profitable business; above 25%, an exceptional one. Comparing it with competitors shows who manages costs better.
Operating margin in the MeridIAn ranking
Among the 2,096 companies in the ranking with data, the median Operating margin is 16.6%: half are below and half above. The lowest 25% are below 8.8% and the highest 25% above 29.6%.
For example: NVIDIA, 66.2%; Apple, 32.6%; Alphabet, 34.0%; Banco Santander, 43.4%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 16.4% | 140 |
| Communication Services | 16.5% | 102 |
| Consumer Cyclical | 10.6% | 226 |
| Consumer Defensive | 11.0% | 124 |
| Energy | 24.0% | 102 |
| Financial Services | 39.1% | 344 |
| Healthcare | 15.8% | 206 |
| Industrials | 12.5% | 386 |
| Real Estate | 41.8% | 100 |
| Technology | 15.8% | 275 |
| Utilities | 22.5% | 91 |
Highest Operating margin
What to watch out for
A good operating margin with a poor net margin points to heavy debt (interest) or high taxes.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.