Profitability & Returns

Gross Margin

The share of each sales dollar left after paying the direct cost of making the product or delivering the service (revenue minus cost of goods sold, divided by revenue). Higher gross margins mean more pricing power and more money left over to reinvest in growth, marketing, or profit. They also tend to be “stickier” than other margins, so a gross margin well above peers is a strong hint of a genuine competitive advantage — customers willing to pay up, or costs the company controls better than rivals. For a newcomer it’s one of the quickest ways to gauge the underlying quality of a business.

Educational information, not investment advice. See it applied across the screener →