Operating Margin - Nomura Holdings Inc (TSE:8604)

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Price: 1 262 JPY -0.71%

Market Cap: 3.7T JPY

11.6%

Current

Average

24%

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

11.6%

Operating Profit

533B

Revenue

4.6T

Operating Margin Across Competitors

Country	Company	Market Cap	Operating Margin
JP	Nomura Holdings Inc TSE:8604	3.7T JPY	12%
US	Morgan Stanley NYSE:MS	281.6B USD	18%
US	Goldman Sachs Group Inc NYSE:GS	270.5B USD	17%
US	Charles Schwab Corp NYSE:SCHW	176.6B USD	39%
EG	EFG Hermes Holdings SAE LSE:EFGD	167.9B USD	0%
US	Robinhood Markets Inc NASDAQ:HOOD	109.1B USD	48%
US	Interactive Brokers Group Inc NASDAQ:IBKR	109B USD	45%
CN	CITIC Securities Co Ltd SSE:600030	425.1B CNY	50%
CN	Guotai Junan Securities Co Ltd SSE:601211	367.9B CNY	49%
US	Raymond James Financial Inc NYSE:RJF	32.1B USD	17%
CN	China Securities Co Ltd SSE:601066	210.5B CNY	53%

Nomura Holdings Inc
Glance View

Economic Moat

None

Market Cap

3.7T JPY

Industry

Financial Services

Nomura Holdings Inc., a venerable name in the world of finance, is Japan’s largest securities company. Founded in 1925, the firm has expanded its reach from its roots in Osaka to become a global powerhouse in financial services. What sets Nomura apart is its comprehensive suite of offerings that cater to a diverse clientele, ranging from retail investors to large institutions. The company operates primarily through three business segments: Retail, Asset Management, and Wholesale, effectively positioning itself to capture various streams of revenue. Each segment plays a crucial role in the firm's overall profitability. Nomura’s retail division provides financial solutions including brokerage services, investment advisory, and wealth management, tapping into the robust demand from Japan’s affluent population seeking to enhance their financial well-being. Globally, Nomura's Wholesale segment, which includes Global Markets and Investment Banking, is where much of its international ambitions take flight. This division handles trading and investment services for both individual and institutional clients, transacting in equities, fixed income, and various derivatives. It leverages its strong research capabilities to offer insights that inform and guide investment strategies. Meanwhile, its Asset Management arm delivers investment solutions not only in Japan but also to a global clientele, focusing on innovative products such as fixed income, equities, and alternative investments. Through these dynamic and interconnected segments, Nomura effectively generates revenue by navigating the intricate demands of each financial service vertical, continuously adapting to the evolving market landscapes, and maintaining its stature as a formidable player on the global stage.

View Nomura Holdings Inc 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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Nomura Holdings Inc
TSE:8604