Hon Hai Precision Industry CoHNHPF +1.23%91 Gross Margin % is 5.88% as of Dec. 2025, which is 5% below its 10-year median of 6.20. GuruFocus rates HNHPF with a GF Score™ of 91/100 and a GF Value™ of $14.03 (Modestly Overvalued). The stock has 1 warning sign investors should review. Among 2,454 Hardware companies, Hon Hai Precision Industry Co ranks worse than 91.48% on this metric.
Hon Hai Precision Industry Co (OTCPK:HNHPF) 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
Hon Hai Precision Industry Co had a gross margin of 5.88% for the quarter that ended in Dec. 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.
Hon Hai Precision Industry Co Gross Margin % Related Terms
Hon Hai Precision Industry Co 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.
Hon Hai Precision Industry Co Gross Margin % Chart
For the Electronic Components subindustry, Hon Hai Precision Industry Co'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.
Hon Hai Precision Industry Co Gross Margin % vs Hardware Industry
For the Hardware industry and Technology sector, Hon Hai Precision Industry Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Hon Hai Precision Industry Co'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.
Hon Hai Precision Industry Co (HNHPF) has a Gross Margin % of 5.88% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Hon Hai Precision Industry Co and its competitors. This is near median its historical median of 6.20. Over the past decade, Hon Hai Precision Industry Co's Gross Margin % has ranged from 5.65 to 7.38. According to the industry distribution chart, Hon Hai Precision Industry Co ranks #2245 out of 2454 companies in the Hardware industry, placing it in the top 91.5%.
Is Hon Hai Precision Industry Co's Gross Margin % too high?
Hon Hai Precision Industry Co's current Gross Margin % of 5.88% is near median its 10-year median of 6.20. Over the past 10 years, this metric has ranged from a low of 5.65 to a high of 7.38. The Hardware industry median Gross Margin % is 24.53. Hon Hai Precision Industry Co's value of 5.88% is 76% below this industry median. Based on the distribution chart, Hon Hai Precision Industry Co ranks #2245 out of 2454 companies in the Hardware industry, which is in the bottom quartile relative to peers. Overall, Hon Hai Precision Industry Co has a GF Score™ of 91/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Hon Hai Precision Industry Co's Gross Margin % compare to APH and GLW?
According to the Hardware industry distribution chart, Hon Hai Precision Industry Co ranks #2245 out of 2454 companies for Gross Margin %. This places Hon Hai Precision Industry Co in the lower half of its industry. The industry median Gross Margin % is 24.53. Hon Hai Precision Industry Co's value of 5.88% is 76% below this benchmark. Historically, Hon Hai Precision Industry Co's own Gross Margin % has ranged from 5.65 to 7.38 over the past decade. While the company's 10-year median is 6.20 vs. the industry median of 24.53, Hon Hai Precision Industry Co 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 Hardware company?
The median Gross Margin % among Hardware companies is 24.53, based on 2,454 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. Hon Hai Precision Industry Co's current Gross Margin % of 5.88% is 76% 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 Hon Hai Precision Industry Co and its competitors. For the Hardware industry, the median Gross Margin % is 24.53 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hon Hai Precision Industry Co's current Gross Margin % is 5.88%, which is near median its own 10-year median of 6.20. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hon Hai Precision Industry Co stock overvalued right now?
Based on GuruFocus' analysis, Hon Hai Precision Industry Co (HNHPF) is currently considered Modestly Overvalued. The stock's GF Value™ is $14.03, compared to a current price of $16.03 — trading 14.2% above its estimated fair value. The current Gross Margin % is 5.88%, which is near median its 10-year median of 6.20 and 76% below the Hardware industry median of 24.53. Hon Hai Precision Industry Co's overall GF Score™ is 91/100 with 1 warning sign 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 Hon Hai Precision Industry Co (HNHPF), the current Gross Margin % is 5.88% as of Dec. 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.
Is Hon Hai Precision Industry Co (HNHPF) Overvalued in 2026?
Based on GuruFocus' analysis, Hon Hai Precision Industry Co stock appears to be overvalued.
The current stock price of $16.03 is trading 14.2% above its estimated GF Value™ of $14.03.
GuruFocus considers Hon Hai Precision Industry Co to be Modestly Overvalued.
Key valuation signals for HNHPF:
Gross Margin %: 5.88% (near median its 10-year median of 6.20)
GF Value™: $14.03 vs. price of $16.03 (14.2% above fair value)
Industry Position: 76% below the Hardware median (#2245 of 2454)
No single metric tells the full story. See the HNHPF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Hon Hai Precision Industry Co Business Description
Hon Hai Precision is the world's largest contract manufacturer of consumer electronics, communications, and computer products. It is the biggest supplier to Apple, whose business accounted for around 50% of overall revenue in 2025. Hon Hai is also involved in the production of upstream components such as electronic connectors, semiconductor packaging, and metal casings for smartphones, as well as producing servers. These upstream activities are mainly conducted through its listed majority-owned subsidiaries Foxconn Industrial Internet and FIH Mobile. In response to its traditional end markets of computers, smartphones, and telecom equipment maturing in 2019 it started on a strategy to develop expertise in three new growth areas—electric vehicles, digital health, and robotics.
91GF Score
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