Psychemedics Corp gross margin has been in long-term decline. The average rate of decline per year is -3.1%.
The historical rank and industry rank for Psychemedics's Gross Margin % or its related term are showing as below:
PMD'
s Gross Margin % Range Over the Past 10 Years
Min: 22.87 Med: 45.39 Max: 55.03
Current: 38.07
During the past 13 years, the highestGross Margin % of Psychemedics was 55.03%. The lowest was 22.87%. And the median was 45.39%.
PMD's Gross Margin % is ranked worse than 62.04% of 216
companies
in the Medical Diagnostics & Research industry
Industry Median: 45.595
vs PMD: 38.07
Psychemedics had a gross margin of 41.18% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Psychemedics was -3.10% per year.
Psychemedics Gross Margin % Historical Data
The historical data trend for Psychemedics's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Psychemedics's Gross Margin %
For the Diagnostics & Research subindustry, Psychemedics's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Psychemedics's Gross Margin % Distribution in the Medical Diagnostics & Research Industry
For the Medical Diagnostics & Research industry and Healthcare sector, Psychemedics's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Psychemedics's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Psychemedics (NAS:PMD) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Psychemedics had a gross margin of 41.18% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Psychemedics Gross Margin % Related Terms
Thank you for viewing the detailed overview of Psychemedics's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Psychemedics Corp is engaged in providing testing services for the detection of drugs of abuse through the analysis of hair samples. The company operates through a single segment of drug testing services which include training for the collection of samples and storage of positive samples for its customers for an agreed-upon fee per unit testing of samples. The testing methods of the company utilize a patented technology that digests the hair and releases drugs trapped in the hair without destroying the drugs. Geographically it generates the majority of its revenue from the United States.
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