Operating Margin - De' Longhi SpA (OTC:DELHF)

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Price: 39.27 USD

Market Cap: 5.9B USD

12.5%

Current

11%

Average

5.1%

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

12.5%

Operating Profit

658.6m

Revenue

5.3B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
IT		De' Longhi SpA MIL:DLG	5.5B EUR	12%
JP		Fujitsu General Ltd TSE:6755	4 282 616.6T JPY	3%
CN		Midea Group Co Ltd SZSE:000333	605.9B CNY	10%
CN		Haier Smart Home Co Ltd SSE:600690	245.1B CNY	8%
CN		Gree Electric Appliances Inc of Zhuhai SZSE:000651	226.5B CNY	18%
US	S	Sharkninja Inc NYSE:SN	16.6B USD	13%
IN		LG Electronics India Ltd NSE:LGEINDIA	970.6B INR	9%
CN	E	Ecovacs Robotics Co Ltd SSE:603486	47.7B CNY	8%
CN	H	Hangzhou Greatstar Industrial Co Ltd SZSE:002444	42.4B CNY	15%
CN		Beijing Roborock Technology Co Ltd SSE:688169	41.4B CNY	7%
CN		Zhejiang Supor Co Ltd SZSE:002032	35.4B CNY	11%

De' Longhi SpA
Glance View

Economic Moat

None

Market Cap

5.9B USD

Industry

Consumer products

De’ Longhi SpA, an Italian multinational company, has grown from its humble beginnings in 1902, when it was founded as a small industrial parts manufacturing workshop, to become a globally recognized brand in the domain of home appliances. The company's evolution is a classic tale of strategic diversification and branding excellence. Originally focused on portable heating products and air-conditioning units, De’ Longhi has successfully expanded its product portfolio to include a wide range of household appliances, particularly earning renown in the coffee machine segment. This strategic pivot towards coffee machines paid off handsomely as the global demand for coffee appliances skyrocketed, with De’ Longhi capturing consumer interests by engineering convenience without compromising on quality—a crucial factor in winning over coffee connoisseurs and everyday users alike. Making money for De’ Longhi primarily revolves around its adeptness in blending innovation with consumer insights, producing appliances that are not only sleek and functional but also address contemporary needs. The company thrives through a combination of global brand strategy and an agile distribution model that allows it to tap into various international markets effectively. With its emphasis on R&D, De’ Longhi continuously finds new ways to enhance its product lines, thus fostering customer loyalty and capturing a significant share of the market. Their financial outlook is buttressed by diverse revenue streams, from their high-margin espresso machines to a host of kitchen appliances and climate control products, positioning De’ Longhi as a resilient actor in the consumer goods landscape. With an eye on sustainability and product quality, the company ensures that its operational strategies align with the evolving tastes and values of its global consumer base.

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DELHF Intrinsic Value

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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.

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De' Longhi SpA
OTC:DELHF