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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
Giga-Tronics had a gross margin of 19.70% for the quarter that ended in Mar. 2024 => 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.
Giga-Tronics Gross Margin % Related Terms
Giga-Tronics Gross Margin % Historical Data
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The historical data trend for Giga-Tronics'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.
GIGAQ vs AWIN, GRMN, KEYS: Gross Margin % Comparison
For the Scientific & Technical Instruments subindustry, Giga-Tronics'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.
Giga-Tronics Gross Margin % vs Hardware Industry
For the Hardware industry and Technology sector, Giga-Tronics's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Giga-Tronics'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.
Giga-Tronics (GIGAQ) has a Gross Margin % of 19.70% as of Mar. 2024. Gross margin is the ratio of total gross profit to net sales. View historical data on Giga-Tronics and its competitors.
Is Giga-Tronics' Gross Margin % too high?
Giga-Tronics' current Gross Margin % is 19.70%. The Hardware industry median Gross Margin % is 24.49. Giga-Tronics' value of 19.70% is 19.6% below this industry median.
How does Giga-Tronics' Gross Margin % compare to AWIN and GRMN?
Giga-Tronics' Gross Margin % of 19.70% can be compared against companies in the Hardware industry. The industry median Gross Margin % is 24.49. Giga-Tronics' value of 19.70% is 19.6% below this benchmark. 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 24.49, based on 2,453 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. Giga-Tronics's current Gross Margin % of 19.70% is 19.6% 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 Giga-Tronics and its competitors. For the Hardware industry, the median Gross Margin % is 24.49 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Giga-Tronics's current Gross Margin % is 19.70%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Giga-Tronics stock overvalued right now?
Giga-Tronics (GIGAQ) has a current Gross Margin % of 19.70%. The current Gross Margin % is 19.70% and 19.6% below the Hardware industry median of 24.49. 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 Giga-Tronics (GIGAQ), the current Gross Margin % is 19.70% as of Mar. 2024. 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.
Giga-Tronics Inc designs, manufactures, and distributes purpose-built electronics equipment, automated test solutions, power electronics, supply and distribution solutions, as well as radio, microwave and millimeter wave communication systems and components for a variety of applications with a focus on the global defense industry and the healthcare market. . The company operates in three segments namely Precision Electronic Solutions; Power Electronics and Display and RF Solutions. It generates maximum revenue from the Precision Electronic Solutions segment.
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