Operating Margin - Fujitsu Ltd (TSE:6702)

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Price: 4 101 JPY 0.15%

Market Cap: 7.5T JPY

Current

Average

3.3%

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

Operating Profit

277.2B

Revenue

3.5T

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
JP		Fujitsu Ltd TSE:6702	7.3T JPY	8%
US		International Business Machines Corp NYSE:IBM	291.3B USD	16%
IE		Accenture PLC NYSE:ACN	169.4B USD	16%
IN		Tata Consultancy Services Ltd NSE:TCS	11.5T INR	25%
IN		Infosys Ltd NSE:INFY	6.6T INR	21%
IN		HCL Technologies Ltd NSE:HCLTECH	4.5T INR	18%
JP		NEC Corp TSE:6701	7.4T JPY	9%
US		Cognizant Technology Solutions Corp NASDAQ:CTSH	40.2B USD	16%
JP		NTT Data Corp TSE:9613	5.6T JPY	7%
JP	N	NTT Data Group Corp DUS:NT5	30.3B EUR	7%
IN		Wipro Ltd NSE:WIPRO	2.7T INR	17%

Fujitsu Ltd
Glance View

Market Cap

7.3T JPY

Industry

Technology

In the bustling landscape of Japan's technological journey, Fujitsu Ltd. stands as a pioneering titan, seamlessly blending tradition with innovation. Emerging from the debris of post-war Japan in 1935, initially focusing on telecommunications, Fujitsu gradually expanded its horizons, diving headlong into the realms of information technology and computing. Today, it is celebrated not only as a hardware manufacturer but also as a key player in the realm of IT services. Fujitsu deftly marries its historical prowess in hardware like servers and storage systems with its rapidly expanding suite of services, offering solutions across cloud computing, artificial intelligence, the Internet of Things, and cybersecurity. The company caters to a diverse clientele, from government entities to sprawling multinational corporations, encapsulating its ability to adapt and evolve in an ever-changing digital landscape. The heartbeat of Fujitsu's revenue streams is its robust IT services. These services constitute a significant portion of its business, channeling growth from solution-driven offerings that cater to complex client demands. From consulting to systems integration and managed services, Fujitsu orchestrates a symphony of digital transformation efforts across multiple sectors. This strategic focus on solution services allows the company to forge deep, long-term relationships with its clients, shielding its revenue streams from the volatility that often plagues pure hardware sales. By anchoring itself firmly in this service-oriented model, Fujitsu not only ensures a steady cash flow but also positions itself as an indispensable ally in its clients' pursuit of modernization and efficiency. With a strong emphasis on R&D and sustainability, Fujitsu is determined to craft a future where technology serves as a harmonious conduit for positive societal change.

View Fujitsu Ltd Analysis

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.

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Fujitsu Ltd
TSE:6702