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
Walgreens Boots Alliance had a gross margin of 16.69% for the quarter that ended in May. 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.
Walgreens Boots Alliance Gross Margin % Related Terms
Walgreens Boots Alliance 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.
BUE:WBA vs WGRX, PETS, BHIC: Gross Margin % Comparison
For the Pharmaceutical Retailers subindustry, Walgreens Boots Alliance'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.
Walgreens Boots Alliance Gross Margin % vs Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Walgreens Boots Alliance's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Walgreens Boots Alliance'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.
Walgreens Boots Alliance (BUE:WBA) has a Gross Margin % of 16.69% as of May. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Walgreens Boots Alliance and its competitors. This is 25% below median its historical median of 22.40. Over the past decade, Walgreens Boots Alliance's Gross Margin % has ranged from 17.96 to 25.86.
Is Walgreens Boots Alliance's Gross Margin % too high?
Walgreens Boots Alliance's current Gross Margin % of 16.69% is 25% below median its 10-year median of 22.40. Over the past 10 years, this metric has ranged from a low of 17.96 to a high of 25.86. The Healthcare Providers & Services industry median Gross Margin % is 40.09. Walgreens Boots Alliance's value of 16.69% is 58.4% below this industry median. Overall, Walgreens Boots Alliance has a GF Score™ of 15/100, reflecting its overall financial health beyond just this single metric.
How does Walgreens Boots Alliance's Gross Margin % compare to WGRX and PETS?
Walgreens Boots Alliance's Gross Margin % of 16.69% can be compared against companies in the Healthcare Providers & Services industry. The industry median Gross Margin % is 40.09. Walgreens Boots Alliance's value of 16.69% is 58.4% below this benchmark. Historically, Walgreens Boots Alliance's own Gross Margin % has ranged from 17.96 to 25.86 over the past decade. While the company's 10-year median is 22.40 vs. the industry median of 40.09, Walgreens Boots Alliance 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 Healthcare Providers & Services company?
The median Gross Margin % among Healthcare Providers & Services companies is 40.09, based on 629 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. Walgreens Boots Alliance's current Gross Margin % of 16.69% is 58.4% 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 Walgreens Boots Alliance and its competitors. For the Healthcare Providers & Services industry, the median Gross Margin % is 40.09 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Walgreens Boots Alliance's current Gross Margin % is 16.69%, which is 25% below median its own 10-year median of 22.40. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Walgreens Boots Alliance stock overvalued right now?
Walgreens Boots Alliance (BUE:WBA) has a current Gross Margin % of 16.69%. The current Gross Margin % is 16.69%, which is 25% below median its 10-year median of 22.40 and 58.4% below the Healthcare Providers & Services industry median of 40.09. Walgreens Boots Alliance's overall GF Score™ is 15/100 with 7 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 Walgreens Boots Alliance (BUE:WBA), the current Gross Margin % is 16.69% as of May. 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.
Walgreens Boots Alliance is one of the largest retail pharmacy chains in the US, with over 8,000 locations. Nearly three quarters of Americans live within five miles of a Walgreens location. Roughly two thirds of revenue is generated from prescription drug sales; Walgreens makes up 20% of total prescription revenue in the US. Walgreens also generates sales from retail products (general wellness consumables and its own branded merchandise), European drug wholesale, and healthcare. With more locations incorporating additional services like Health Corner and Village Medical, Walgreens creates an omnichannel experience for patients and positions itself as a one-stop healthcare provider.
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