Lumentum Holdings Inc gross margin has been in long-term decline. The average rate of decline per year is -6.8%.
The historical rank and industry rank for Lumentum Holdings's Gross Margin % or its related term are showing as below:
LITE'
s Gross Margin % Range Over the Past 10 Years
Min: 18.33 Med: 31.98 Max: 46.05
Current: 18.33
During the past 13 years, the highestGross Margin % of Lumentum Holdings was 46.05%. The lowest was 18.33%. And the median was 31.98%.
LITE's Gross Margin % is ranked worse than 64.7% of 2422
companies
in the Hardware industry
Industry Median: 24.655
vs LITE: 18.33
Lumentum Holdings had a gross margin of 23.12% for the quarter that ended in Sep. 2024 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Lumentum Holdings was -6.80% per year.
Lumentum Holdings Gross Margin % Historical Data
The historical data trend for Lumentum Holdings'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.
Competitive Comparison of Lumentum Holdings's Gross Margin %
For the Communication Equipment subindustry, Lumentum Holdings'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.
Lumentum Holdings's Gross Margin % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Lumentum Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Lumentum Holdings'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.
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
Lumentum Holdings had a gross margin of 23.12% for the quarter that ended in Sep. 2024 => 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.
Lumentum Holdings Gross Margin % Related Terms
Thank you for viewing the detailed overview of Lumentum Holdings's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Lumentum Holdings Inc is a California-based technology firm. The company provides two types of optical and photonic products: optical components that are used in telecommunications networking equipment, and commercial lasers for manufacturing, inspection, and life-science lab uses. Its segments are Optical Communications and Commercial Lasers. The firm is also expanding into new optical applications, such as 3-D sensing laser diode for consumer electronics. It generates maximum revenue from the OpComms segment. The OpComms segment products include a wide range of components, modules, and subsystems to support customers including carrier networks for access (local), metro (intracity), long-haul, and submarine (undersea) applications.
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