Operating Margin - II-VI Inc (LSE:0LHO)

Watchlist Manager

Watchlist

Price: 79.845 USD 23.13%

Market Cap: 522.4B USD

11.3%

Current

Average

3.8%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

11.3%

Operating Profit

682m

Revenue

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US	I	II-VI Inc LSE:0LHO	522.4B USD	11%
US		Amphenol Corp NYSE:APH	159.2B USD	25%
TW		Delta Electronics Inc TWSE:2308	2.3T TWD	13%
US		Corning Inc NYSE:GLW	70.6B USD	13%
TH		Delta Electronics Thailand PCL SET:DELTA	2.2T THB	12%
CN		Eoptolink Technology Inc Ltd SZSE:300502	404.1B CNY	40%
CN		Luxshare Precision Industry Co Ltd SZSE:002475	415.7B CNY	4%
JP		Murata Manufacturing Co Ltd TSE:6981	5.8T JPY	16%
CN		Victory Giant Technology HuiZhou Co Ltd SZSE:300476	247.7B CNY	25%
US		Coherent Corp NYSE:COHR	28.2B USD	11%
JP		TDK Corp TSE:6762	4.2T JPY	10%

II-VI Inc
Glance View

Economic Moat

None

Market Cap

522.4B USD

Industry

Electrical Equipment

II-VI Inc., now known as Coherent Corp. after its acquisition of Coherent Inc. in 2022, is a fascinating player in the world of advanced materials and optoelectronic components. Originating as a pioneering company in the realm of engineered materials and optoelectronic components, it carved a niche with a strong focus on compound semiconductors. These materials play a crucial role in enabling a variety of sophisticated technologies, ranging from communications to military applications. The company's early mastery in areas like thermal management solutions and precision optics laid the groundwork for its evolution. Over time, II-VI leveraged its expertise to expand into photonics, leveraging their ability to identify and develop solutions for high-impact industry needs. The transformation into Coherent Corp. marked a strategic shift into the broader domain of optical and laser technologies. This acquisition broadened the company's portfolio substantially and bolstered its revenues through enhanced capabilities in end markets such as industrial, communications, electronics, and life sciences. Coherent Corp. now excels in creating value by designing, manufacturing, and commercializing a wide range of materials and components integral to modern photonics. Through a robust combination of advanced materials and cutting-edge optics, it continues to lead in the innovation space, serving as a critical supplier in industries eager for precision and efficiency. The company's financial growth reflects its ability to tap into the burgeoning demand for laser-based technologies, extending its reach globally and securing a future that's as bright as the lasers it helps create.

View 0LHO Analysis

0LHO Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	211.31 USD -1.34%
	Berkshire Hathaway Inc NYSE:BRK.A	753 000 USD -0.82%
	Bank of America Corp NYSE:BAC	54.935 USD -0.71%
	Mastercard Inc NYSE:MA	566.4 USD -0.48%
	UnitedHealth Group Inc NYSE:UNH	337.165 USD -1.15%
	Exxon Mobil Corp NYSE:XOM	115.205 USD -2.17%

	Franklin Covey Co NYSE:FC	16.58 USD 2.22%
	Mohawk Industries Inc NYSE:MHK	110.02 USD -1.32%
	Ardmore Shipping Corp NYSE:ASC	11.15 USD -1.06%
	ASGN Inc NYSE:ASGN	48.125 USD 0.36%
	Skyworks Solutions Inc NASDAQ:SWKS	65.75 USD -0.93%
	Weatherford International PLC NASDAQ:WFRD	76.31 USD -3.39%

	Johnson & Johnson NYSE:JNJ	211.31 USD -1.34%
	Bank of America Corp NYSE:BAC	54.935 USD -0.71%
	Mastercard Inc NYSE:MA	566.4 USD -0.48%
	Salesforce Inc NYSE:CRM	253.81 USD -0.3%
	Abbvie Inc NYSE:ABBV	223.385 USD -1.79%
	Home Depot Inc NYSE:HD	354.7676 USD -0.62%

	Monolithic Power Systems Inc NASDAQ:MPWR	953.275 USD 0.41%
	Applovin Corp NASDAQ:APP	659.2 USD -2.37%
	NVIDIA Corp NASDAQ:NVDA	175.97 USD -0.18%
	Cal-Maine Foods Inc NASDAQ:CALM	87.37 USD -0.74%
	Pro Medicus Ltd ASX:PME	226.05 AUD -3.27%
	Lundin Gold Inc TSX:LUG	113.48 CAD 2.23%

II-VI Inc
LSE:0LHO