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
Southern Cross Electrical Engineering had a gross margin of 18.87% for the quarter that ended in Dec. 2025 => No sustainable 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.
Southern Cross Electrical Engineering Gross Margin % Related Terms
Southern Cross Electrical Engineering Gross Margin % Historical Data
* 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.
ASX:SXE vs PWR, FIX, EME: Gross Margin % Comparison
For the Engineering & Construction subindustry, Southern Cross Electrical Engineering'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.
Southern Cross Electrical Engineering Gross Margin % vs Construction Industry
For the Construction industry and Industrials sector, Southern Cross Electrical Engineering's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Southern Cross Electrical Engineering'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.
Southern Cross Electrical Engineering (ASX:SXE) has a Gross Margin % of 18.87% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Southern Cross Electrical Engineering and its competitors. This is 43% above median its historical median of 13.16. Over the past decade, Southern Cross Electrical Engineering's Gross Margin % has ranged from 10.73 to 16.41. According to the industry distribution chart, Southern Cross Electrical Engineering ranks #1057 out of 1719 companies in the Construction industry, placing it in the top 61.5%.
Is Southern Cross Electrical Engineering's Gross Margin % too high?
Southern Cross Electrical Engineering's current Gross Margin % of 18.87% is 43% above median its 10-year median of 13.16. Over the past 10 years, this metric has ranged from a low of 10.73 to a high of 16.41. The Construction industry median Gross Margin % is 20.71. Southern Cross Electrical Engineering's value of 18.87% is 8.9% below this industry median. Based on the distribution chart, Southern Cross Electrical Engineering ranks #1057 out of 1719 companies in the Construction industry, which is below the industry midpoint. Overall, Southern Cross Electrical Engineering has a GF Score™ of 76/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Southern Cross Electrical Engineering's Gross Margin % compare to PWR and FIX?
According to the Construction industry distribution chart, Southern Cross Electrical Engineering ranks #1057 out of 1719 companies for Gross Margin %. This places Southern Cross Electrical Engineering in the lower half of its industry. The industry median Gross Margin % is 20.71. Southern Cross Electrical Engineering's value of 18.87% is 8.9% below this benchmark. Historically, Southern Cross Electrical Engineering's own Gross Margin % has ranged from 10.73 to 16.41 over the past decade. While the company's 10-year median is 13.16 vs. the industry median of 20.71, Southern Cross Electrical Engineering has consistently been below the industry average. 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 Construction company?
The median Gross Margin % among Construction companies is 20.71, based on 1,719 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. Southern Cross Electrical Engineering's current Gross Margin % of 18.87% is 8.9% below 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 Southern Cross Electrical Engineering and its competitors. For the Construction industry, the median Gross Margin % is 20.71 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Southern Cross Electrical Engineering's current Gross Margin % is 18.87%, which is 43% above median its own 10-year median of 13.16. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Southern Cross Electrical Engineering stock overvalued right now?
Based on GuruFocus' analysis, Southern Cross Electrical Engineering (ASX:SXE) is currently considered Significantly Overvalued. The stock's GF Value™ is A$2.02, compared to a current price of A$4.86 — trading 140.6% above its estimated fair value. The current Gross Margin % is 18.87%, which is 43% above median its 10-year median of 13.16 and 8.9% below the Construction industry median of 20.71. Southern Cross Electrical Engineering's overall GF Score™ is 76/100 with 6 warning signs to review. 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 Southern Cross Electrical Engineering (ASX:SXE), the current Gross Margin % is 18.87% as of Dec. 2025. 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.
Is Southern Cross Electrical Engineering (ASX:SXE) Overvalued in 2026?
Based on GuruFocus' analysis, Southern Cross Electrical Engineering stock appears to be overvalued.
The current stock price of A$4.86 is trading 140.6% above its estimated GF Value™ of A$2.02.
GuruFocus considers Southern Cross Electrical Engineering to be Significantly Overvalued.
Key valuation signals for ASX:SXE:
Gross Margin %: 18.87% (43% above median its 10-year median of 13.16)
GF Value™: A$2.02 vs. price of A$4.86 (140.6% above fair value)
Industry Position: 8.9% below the Construction median (#1057 of 1719)
No single metric tells the full story. See the ASX:SXE stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Southern Cross Electrical Engineering Business Description
Southern Cross Electrical Engineering Ltd engages in the provision of electrical, instrumentation, communication, and maintenance services. It serves various sectors such as commercial developments; public infrastructure and defence; resources-mining, oil and gas; industrial, utilities and energy; telecommunications and data centres. The company provides its services through the three key segments of SCEE, Heyday, and Trivantage. Geographically, it derives a majority of revenue from Australia.
76GF Score
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