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
Cyxtera Technologies had a gross margin of 47.23% for the quarter that ended in Mar. 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.
Cyxtera Technologies Gross Margin % Related Terms
Cyxtera Technologies Gross Margin % Historical Data
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The historical data trend for Cyxtera 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.
CYXTW vs FCCN, GTCH, SASI: Gross Margin % Comparison
For the Information Technology Services subindustry, Cyxtera 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.
Cyxtera Technologies Gross Margin % vs Software Industry
For the Software industry and Technology sector, Cyxtera Technologies's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Cyxtera 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.
Cyxtera Technologies (CYXTW) has a Gross Margin % of 47.23% as of Mar. 2023. Gross margin is the ratio of total gross profit to net sales. View historical data on Cyxtera Technologies and its competitors. This is near median its historical median of 44.51. Over the past decade, Cyxtera Technologies' Gross Margin % has ranged from 43.45 to 46.37.
Is Cyxtera Technologies' Gross Margin % too high?
Cyxtera Technologies' current Gross Margin % of 47.23% is near median its 10-year median of 44.51. Over the past 10 years, this metric has ranged from a low of 43.45 to a high of 46.37. The Software industry median Gross Margin % is 40.45. Cyxtera Technologies' value of 47.23% is 16.8% above this industry median. Overall, Cyxtera Technologies has a GF Score™ of 16/100, reflecting its overall financial health beyond just this single metric.
How does Cyxtera Technologies' Gross Margin % compare to FCCN and GTCH?
Cyxtera Technologies' Gross Margin % of 47.23% can be compared against companies in the Software industry. The industry median Gross Margin % is 40.45. Cyxtera Technologies' value of 47.23% is 16.8% above this benchmark. Historically, Cyxtera Technologies' own Gross Margin % has ranged from 43.45 to 46.37 over the past decade. While the company's 10-year median is 44.51 vs. the industry median of 40.45, Cyxtera Technologies has consistently been above 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 Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,681 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. Cyxtera Technologies's current Gross Margin % of 47.23% is 16.8% 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 Cyxtera 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. Cyxtera Technologies's current Gross Margin % is 47.23%, which is near median its own 10-year median of 44.51. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cyxtera Technologies stock overvalued right now?
Cyxtera Technologies (CYXTW) has a current Gross Margin % of 47.23%. The current Gross Margin % is 47.23%, which is near median its 10-year median of 44.51 and 16.8% above the Software industry median of 40.45. Cyxtera Technologies' overall GF Score™ is 16/100 with 2 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 Cyxtera Technologies (CYXTW), the current Gross Margin % is 47.23% as of Mar. 2023. 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.
Cyxtera Technologies Inc is engaged in data center colocation and interconnection services. The company operates a footprint of more than 60 data centers around the world, providing services to more than 2,300 leading enterprises and U.S. federal government agencies. Cyxtera brings proven operational excellence, global scale, flexibility and customer-focused innovation together to provide a comprehensive portfolio of data center and interconnection services.
16GF Score
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