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
Adacel Technologies had a gross margin of 69.81% for the quarter that ended in Jun. 2024 => 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.
Adacel Technologies Gross Margin % Related Terms
Adacel Technologies Gross Margin % Historical Data
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The historical data trend for Adacel Technologies'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.
AELTF vs CURR, RDZN, YAAS: Gross Margin % Comparison
For the Software - Application subindustry, Adacel Technologies'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.
Adacel Technologies Gross Margin % vs Software Industry
For the Software industry and Technology sector, Adacel Technologies's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Adacel Technologies'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.
Adacel Technologies (AELTF) has a Gross Margin % of 69.81% as of Jun. 2024. Gross margin is the ratio of total gross profit to net sales. View historical data on Adacel Technologies and its competitors.
Is Adacel Technologies' Gross Margin % too high?
Adacel Technologies' current Gross Margin % is 69.81%. The Software industry median Gross Margin % is 40.45. Adacel Technologies' value of 69.81% is 72.6% above this industry median. Overall, Adacel Technologies has a GF Score™ of 12/100, reflecting its overall financial health beyond just this single metric.
How does Adacel Technologies' Gross Margin % compare to CURR and RDZN?
Adacel Technologies' Gross Margin % of 69.81% can be compared against companies in the Software industry. The industry median Gross Margin % is 40.45. Adacel Technologies' value of 69.81% is 72.6% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,680 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Adacel Technologies's current Gross Margin % of 69.81% is 72.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Adacel Technologies and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Adacel Technologies's current Gross Margin % is 69.81%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Adacel Technologies stock overvalued right now?
Adacel Technologies (AELTF) has a current Gross Margin % of 69.81%. The current Gross Margin % is 69.81% and 72.6% above the Software industry median of 40.45. Adacel Technologies' overall GF Score™ is 12/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Adacel Technologies (AELTF), the current Gross Margin % is 69.81% as of Jun. 2024. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Adacel Technologies Ltd develops and sells simulation and control systems. The company's operating segment includes Systems and Services. It generates maximum revenue from the Services segment. The Services segment includes software maintenance and all aspects of system support, field services, and on-site technical services. Its Systems segment includes operational air traffic management as well as simulation and training applications. Geographically, it derives a majority of its revenue from Canada and also has a presence in the USA Estonia and Australia.
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