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Red VioletFRA:2KH -2.65%69 Gross Margin % is 85.22% as of Mar. 2026, which is 20% above its 10-year median of 70.99. GuruFocus rates FRA:2KH with a GF Score™ of 69/100 and a GF Value™ of €34.53 (Significantly Overvalued). The stock has 4 warning signs investors should review. Among 2,688 Software companies, Red Violet ranks better than 91.63% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. Red Violet's Gross Profit for the
three
months ended in Mar. 2026 was €19.04 Mil. Red Violet's Revenue for the
three
months ended in Mar. 2026 was €22.34 Mil. Therefore, Red Violet's Gross Margin % for the quarter that ended in Mar. 2026 was 85.22%.
The historical rank and industry rank for Red Violet's Gross Margin % or its related term are showing as below:
FRA:2KH'
s Gross Margin % Range Over the Past 10 Years
Min: 6.09 Med: 70.99 Max: 84.23
Current: 84.23
During the past 10 years, the highestGross Margin % of Red Violet was 84.23%. The lowest was 6.09%. And the median was 70.99%.
FRA:2KH's Gross Margin % is ranked better than 91.63% of 2688
companies
in the Software industry
Industry Median: 40.48
vs FRA:2KH: 84.23
Red Violet had a gross margin of 85.22% for the quarter that ended in Mar. 2026 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Red Violet was 4.00% per year.
Red Violet (FRA:2KH) Gross Margin % 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
Red Violet had a gross margin of 85.22% for the quarter that ended in Mar. 2026 => 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.
Red Violet Gross Margin % Related Terms
Red Violet Gross Margin % Historical Data
* Premium members only.
The historical data trend for Red Violet'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.
FRA:2KH vs GTM, MITK, IBTA: Gross Margin % Comparison
For the Software - Application subindustry, Red Violet'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.
Red Violet Gross Margin % vs Software Industry
For the Software industry and Technology sector, Red Violet's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Red Violet'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.
Red Violet (FRA:2KH) has a Gross Margin % of 85.22% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Red Violet and its competitors. This is 20% above median its historical median of 70.99. Over the past decade, Red Violet's Gross Margin % has ranged from 6.09 to 84.23. According to the industry distribution chart, Red Violet ranks #225 out of 2688 companies in the Software industry, placing it in the top 8.4%.
Is Red Violet's Gross Margin % too high?
Red Violet's current Gross Margin % of 85.22% is 20% above median its 10-year median of 70.99. Over the past 10 years, this metric has ranged from a low of 6.09 to a high of 84.23. The Software industry median Gross Margin % is 40.48. Red Violet's value of 85.22% is 110.5% above this industry median. Based on the distribution chart, Red Violet ranks #225 out of 2688 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Red Violet has a GF Score™ of 69/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Red Violet's Gross Margin % compare to GTM and MITK?
According to the Software industry distribution chart, Red Violet ranks #225 out of 2688 companies for Gross Margin %. This places Red Violet in the top 8% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 40.48. Red Violet's value of 85.22% is 110.5% above this benchmark. Historically, Red Violet's own Gross Margin % has ranged from 6.09 to 84.23 over the past decade. While the company's 10-year median is 70.99 vs. the industry median of 40.48, Red Violet 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 40.48, based on 2,688 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. Red Violet's current Gross Margin % of 85.22% is 110.5% 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 Red Violet and its competitors. For the Software industry, the median Gross Margin % is 40.48 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Red Violet's current Gross Margin % is 85.22%, which is 20% above median its own 10-year median of 70.99. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Red Violet stock overvalued right now?
Based on GuruFocus' analysis, Red Violet (FRA:2KH) is currently considered Significantly Overvalued. The stock's GF Value™ is €34.53, compared to a current price of €55.00 — trading 59.3% above its estimated fair value. The current Gross Margin % is 85.22%, which is 20% above median its 10-year median of 70.99 and 110.5% above the Software industry median of 40.48. Red Violet's overall GF Score™ is 69/100 with 4 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 Red Violet (FRA:2KH), the current Gross Margin % is 85.22% as of Mar. 2026. 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 Red Violet (FRA:2KH) Overvalued in 2026?
Based on GuruFocus' analysis, Red Violet stock appears to be overvalued.
The current stock price of €55.00 is trading 59.3% above its estimated GF Value™ of €34.53.
GuruFocus considers Red Violet to be Significantly Overvalued.
Key valuation signals for FRA:2KH:
Gross Margin %: 85.22% (20% above median its 10-year median of 70.99)
GF Value™: €34.53 vs. price of €55.00 (59.3% above fair value)
Industry Position: 110.5% above the Software median (#225 of 2688)
No single metric tells the full story. See the FRA:2KH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Red Violet Inc builds proprietary technologies and applies analytical capabilities to deliver identity intelligence. The company's solutions enable the real-time identification and location of people, businesses, assets, and their interrelationships. These solutions are used for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. Its cloud-native, AI-enabled identity intelligence platform, CORE, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. The company generates substantially all of its revenue from licensing its solutions.
69GF Score
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