Alternative EnergyLSE:ALR Gross Margin % is 36.94% as of Jun. 2014, which is 60% above its 10-year median of 23.08. The stock has 4 warning signs investors should review.
Alternative Energy had a gross margin of 36.94% for the quarter that ended in Jun. 2014 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Alternative Energy was 0.00% per year.
Alternative Energy (LSE:ALR) 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
Alternative Energy had a gross margin of 36.94% for the quarter that ended in Jun. 2014 => 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.
Alternative Energy Gross Margin % Related Terms
Alternative Energy Gross Margin % Historical Data
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The historical data trend for Alternative Energy'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.
Alternative Energy Gross Margin % Competitor Comparison
For the Utilities - Independent Power Producers subindustry, Alternative Energy'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.
Alternative Energy Gross Margin % vs Utilities - Independent Power Producers Industry
For the Utilities - Independent Power Producers industry and Utilities sector, Alternative Energy's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Alternative Energy'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.
Alternative Energy (LSE:ALR) has a Gross Margin % of 36.94% as of Jun. 2014. Gross margin is the ratio of total gross profit to net sales. View historical data on Alternative Energy and its competitors. This is 60% above median its historical median of 23.08. Over the past decade, Alternative Energy's Gross Margin % has ranged from 13.21 to 41.51.
Is Alternative Energy's Gross Margin % too high?
Alternative Energy's current Gross Margin % of 36.94% is 60% above median its 10-year median of 23.08. Over the past 10 years, this metric has ranged from a low of 13.21 to a high of 41.51. The Utilities - Independent Power Producers industry median Gross Margin % is 31.35. Alternative Energy's value of 36.94% is 17.8% above this industry median.
How does Alternative Energy's Gross Margin % compare to competitors?
Alternative Energy's Gross Margin % of 36.94% can be compared against companies in the Utilities - Independent Power Producers industry. The industry median Gross Margin % is 31.35. Alternative Energy's value of 36.94% is 17.8% above this benchmark. Historically, Alternative Energy's own Gross Margin % has ranged from 13.21 to 41.51 over the past decade. While the company's 10-year median is 23.08 vs. the industry median of 31.35, Alternative Energy 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 an Utilities - Independent Power Producers company?
The median Gross Margin % among Utilities - Independent Power Producers companies is 31.35, based on 403 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. Alternative Energy's current Gross Margin % of 36.94% is 17.8% 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 Alternative Energy and its competitors. For the Utilities - Independent Power Producers industry, the median Gross Margin % is 31.35 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Alternative Energy's current Gross Margin % is 36.94%, which is 60% above median its own 10-year median of 23.08. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Alternative Energy stock overvalued right now?
Alternative Energy (LSE:ALR) has a current Gross Margin % of 36.94%. The current Gross Margin % is 36.94%, which is 60% above median its 10-year median of 23.08 and 17.8% above the Utilities - Independent Power Producers industry median of 31.35. 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 Alternative Energy (LSE:ALR), the current Gross Margin % is 36.94% as of Jun. 2014. 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.
Alternative Energy Ltd provides technology, hardware and equipment for renewable energy and green energy solutions. Its solutions include Renewable Energy, The E-Roof - The PC of Energy, and AEL Energy Saving products such as eLIVE and eLUMEN. It also makes acquisitions to develop energy technologies, business and companies which offer an alternative to conventional fossil fuel and nuclear methods of generating household and industrial energy, as well as providing management services to its subsidiaries.
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