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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
Richardson Electronics had a gross margin of 31.21% for the quarter that ended in May. 2026 => Competition eroding margins
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.
Richardson Electronics Gross Margin % Related Terms
Richardson Electronics Gross Margin % Historical Data
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The historical data trend for Richardson Electronics'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:RE3 vs OPTX, MPTI, KULR: Gross Margin % Comparison
For the Electronic Components subindustry, Richardson Electronics'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.
Richardson Electronics Gross Margin % vs Hardware Industry
For the Hardware industry and Technology sector, Richardson Electronics's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Richardson Electronics'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.
Richardson Electronics (FRA:RE3) has a Gross Margin % of 31.21% as of May. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Richardson Electronics and its competitors. This is near median its historical median of 31.86. Over the past decade, Richardson Electronics' Gross Margin % has ranged from 30.52 to 33.75. According to the industry distribution chart, Richardson Electronics ranks #929 out of 2455 companies in the Hardware industry, placing it in the top 37.8%.
Is Richardson Electronics' Gross Margin % too high?
Richardson Electronics' current Gross Margin % of 31.21% is near median its 10-year median of 31.86. Over the past 10 years, this metric has ranged from a low of 30.52 to a high of 33.75. The Hardware industry median Gross Margin % is 24.66. Richardson Electronics' value of 31.21% is 26.6% above this industry median. Based on the distribution chart, Richardson Electronics ranks #929 out of 2455 companies in the Hardware industry, which is above the industry midpoint. Overall, Richardson Electronics has a GF Score™ of 62/100, reflecting its overall financial health beyond just this single metric.
How does Richardson Electronics' Gross Margin % compare to OPTX and MPTI?
According to the Hardware industry distribution chart, Richardson Electronics ranks #929 out of 2455 companies for Gross Margin %. This puts Richardson Electronics in the upper half of its industry. The industry median Gross Margin % is 24.66. Richardson Electronics' value of 31.21% is 26.6% above this benchmark. Historically, Richardson Electronics' own Gross Margin % has ranged from 30.52 to 33.75 over the past decade. While the company's 10-year median is 31.86 vs. the industry median of 24.66, Richardson Electronics 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 Hardware company?
The median Gross Margin % among Hardware companies is 24.66, based on 2,455 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. Richardson Electronics's current Gross Margin % of 31.21% is 26.6% 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 Richardson Electronics and its competitors. For the Hardware industry, the median Gross Margin % is 24.66 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Richardson Electronics's current Gross Margin % is 31.21%, which is near median its own 10-year median of 31.86. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Richardson Electronics stock overvalued right now?
Richardson Electronics (FRA:RE3) has a current Gross Margin % of 31.21%. The stock's GF Value™ is €10.49, compared to a current price of €16.86 — trading 60.7% above its estimated fair value. The current Gross Margin % is 31.21%, which is near median its 10-year median of 31.86 and 26.6% above the Hardware industry median of 24.66. Richardson Electronics' overall GF Score™ is 62/100 with 9 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 Richardson Electronics (FRA:RE3), the current Gross Margin % is 31.21% as of May. 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 Richardson Electronics (FRA:RE3) Overvalued in 2026?
Based on GuruFocus' analysis, Richardson Electronics stock appears to be overvalued.
The current stock price of €16.86 is trading 60.7% above its estimated GF Value™ of €10.49.
Key valuation signals for FRA:RE3:
Gross Margin %: 31.21% (near median its 10-year median of 31.86)
GF Value™: €10.49 vs. price of €16.86 (60.7% above fair value)
Industry Position: 26.6% above the Hardware median (#929 of 2455)
No single metric tells the full story. See the FRA:RE3 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Richardson Electronics Ltd provides engineered solutions, power grid, and microwave tubes and related consumables, power conversion, RF and microwave components, high-value flat panel detector solutions, replacement parts, tubes, and service training for diagnostic imaging equipment and customized display solutions. The company's segment includes Power and Microwave Technologies, Green Energy Solutions, Canvys, and Healthcare. The company generates the majority of its revenue from the Power and Microwave Technologies segment, which includes the power grid and microwave tube business and RF, Wireless and Power technologies.
62GF Score
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Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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