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Synaptics Inc (NAS:SYNA)
Gross Margin
31.95% (As of Sep. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Synaptics Inc's gross profit for the three months ended in Sep. 2016 was $123 Mil. Synaptics Inc's revenue for the three months ended in Sep. 2016 was $386 Mil. Therefore, Synaptics Inc's Gross Margin for the quarter that ended in Sep. 2016 was 31.95%.

Warning Sign:

Synaptics Inc gross margin has been in long term decline. The average rate of decline per year is -5.1%.

SYNA' s Gross Margin Range Over the Past 10 Years
Min: 33.98   Max: 49.1
Current: 34.18

33.98
49.1

During the past 13 years, the highest Gross Margin of Synaptics Inc was 49.10%. The lowest was 33.98%. And the median was 40.69%.

SYNA's Gross Margin is ranked lower than
67% of the 1867 Companies
in the Global Software - Application industry.

( Industry Median: 52.89 vs. SYNA: 34.18 )

Synaptics Inc had a gross margin of 31.95% for the quarter that ended in Sep. 2016 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Synaptics Inc was -5.10% per year.


Definition

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Synaptics Inc's Gross Margin for the fiscal year that ended in Jun. 2016 is calculated as

Gross Margin (A: Jun. 2016 )=Gross Profit (A: Jun. 2016 ) / Revenue (A: Jun. 2016 )
=581.5 / 1666.9
=(Revenue - Cost of Goods Sold) / Revenue
=(1666.9 - 1085.4) / 1666.9
=34.89 %

Synaptics Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=123.4 / 386.2
=(Revenue - Cost of Goods Sold) / Revenue
=(386.2 - 262.8) / 386.2
=31.95 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.


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

Synaptics Inc had a gross margin of 31.95% for the quarter that ended in Sep. 2016 => Competition eroding margins


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.


Related Terms

Operating Margin, Cost of Goods Sold, Gross Profit, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Synaptics Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Gross Margin 39.6840.8440.4640.5341.1146.6249.1046.0333.9834.89

Synaptics Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross Margin 44.4242.5427.3534.4034.9334.8535.1135.8833.3731.95
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