Operating Margin - Goodyear Tire & Rubber Co (NASDAQ:GT)

Watchlist Manager

Watchlist

Price: 8.87 USD -1.55%

Market Cap: 2.5B USD

2.3%

Current

Average

5.3%

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

2.3%

Operating Profit

424m

Revenue

18.3B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Goodyear Tire & Rubber Co NASDAQ:GT	2.5B USD	2%
JP		Bridgestone Corp TSE:5108	4.7T JPY	8%
FR		Compagnie Generale des Etablissements Michelin SCA PAR:ML	20B EUR	11%
CN		Sailun Group Co Ltd SSE:601058	55.9B CNY	13%
IN		MRF Ltd NSE:MRF	651.3B INR	8%
IT		Pirelli & C SpA MIL:PIRC	5.9B EUR	13%
JP		Yokohama Rubber Co Ltd TSE:5101	1T JPY	11%
IN		Balkrishna Industries Ltd NSE:BALKRISIND	457.3B INR	14%
KR	H	Hankook Tire & Technology Co Ltd KRX:161390	7.5T KRW	11%
JP		Toyo Tire Corp TSE:5105	686.7B JPY	15%
JP		Sumitomo Rubber Industries Ltd TSE:5110	648.7B JPY	4%

Goodyear Tire & Rubber Co
Glance View

Economic Moat

None

Market Cap

2.5B USD

Industry

Auto Components

From the bustling streets of the early 20th century to today's interconnected highways, Goodyear Tire & Rubber Co. has confidently rolled along as a significant force in the tire industry. Founded in 1898 by Frank Seiberling, the company began with bicycles and carriages in mind. As the automobile revolution gained traction, Goodyear adeptly adjusted its focus, producing tires suited for the growing market of motor vehicles. The company's innovation and dedication to quality in manufacturing quickly earned it a reputation, propelling Goodyear to become one of the largest tire manufacturers in the world. Headquartered in Akron, Ohio, Goodyear has built a vast network of production facilities and robust distribution channels across the globe, showcasing its ability to adapt to and harness the winds of change over the decades. The core of Goodyear's revenue model lies in designing, manufacturing, and selling tires for a diverse range of vehicles – from passenger cars and motorcycles to trucks, SUVs, and specialized commercial vehicles. It's not just the endpoints of design and sale; Goodyear's prowess is equally evident in its attention to research and development, where continuous technological innovation leads to improvements in tire performance, durability, and sustainability. Retail networks, including branded stores and online platforms, broaden its market reach. Additionally, the company's strategic partnerships with automakers and presence in aftermarket tire sales help cement its revenue base. Goodyear's operations are supported by a keen focus on cost management and efficient production processes, ensuring it remains competitive in a highly price-sensitive market. Through this intricate web of production, research, and strategic alignment, Goodyear not only sells tires but also crafts solutions that keep the world's vehicles moving forward efficiently and safely.

View GT Analysis

GT 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	206.37 USD -0.93%
	Berkshire Hathaway Inc NYSE:BRK.A	745 600 USD -1.34%
	Bank of America Corp NYSE:BAC	55.27 USD 1.86%
	Mastercard Inc NYSE:MA	572.23 USD 1.06%
	UnitedHealth Group Inc NYSE:UNH	327.42 USD -0.22%
	Exxon Mobil Corp NYSE:XOM	116.69 USD 0.13%

	Franklin Covey Co NYSE:FC	16.88 USD -0.53%
	Mohawk Industries Inc NYSE:MHK	107.88 USD -1.47%
	Ardmore Shipping Corp NYSE:ASC	10.89 USD 0.37%
	ASGN Inc NYSE:ASGN	48.8 USD -0.51%
	Skyworks Solutions Inc NASDAQ:SWKS	64.68 USD 0.29%
	Weatherford International PLC NASDAQ:WFRD	78.83 USD 2.38%

	Johnson & Johnson NYSE:JNJ	206.37 USD -0.93%
	Bank of America Corp NYSE:BAC	55.27 USD 1.86%
	Mastercard Inc NYSE:MA	572.23 USD 1.06%
	Salesforce Inc NYSE:CRM	259.91 USD 0.8%
	Abbvie Inc NYSE:ABBV	226.82 USD 1.8%
	Home Depot Inc NYSE:HD	345 USD -2.81%

	Monolithic Power Systems Inc NASDAQ:MPWR	937.11 USD 0.82%
	Applovin Corp NASDAQ:APP	721.37 USD 3.89%
	NVIDIA Corp NASDAQ:NVDA	180.99 USD 3.93%
	Cal-Maine Foods Inc NASDAQ:CALM	85.7 USD -0.43%
	Pro Medicus Ltd ASX:PME	217.37 AUD 1.17%
	Lundin Gold Inc TSX:LUG	113.69 CAD -1.01%

Goodyear Tire & Rubber Co
NASDAQ:GT