Avanta Serviced Office Group (LSE:ASOA) 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
Avanta Serviced Office Group had a gross margin of 15.79% for the quarter that ended in Jun. 2014 => 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.
Avanta Serviced Office Group Gross Margin % Related Terms
Avanta Serviced Office Group 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.
LSE:ASOA vs AINC, HCAP, OCCAF: Gross Margin % Comparison
For the Asset Management subindustry, Avanta Serviced Office Group'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.
Avanta Serviced Office Group Gross Margin % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, Avanta Serviced Office Group's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Avanta Serviced Office Group'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.
Avanta Serviced Office Group (LSE:ASOA) has a Gross Margin % of 15.79% as of Jun. 2014. Gross margin is the ratio of total gross profit to net sales. View historical data on Avanta Serviced Office Group and its competitors. This is 48% below median its historical median of 30.58. Over the past decade, Avanta Serviced Office Group's Gross Margin % has ranged from 12.69 to 46.40.
Is Avanta Serviced Office Group's Gross Margin % too high?
Avanta Serviced Office Group's current Gross Margin % of 15.79% is 48% below median its 10-year median of 30.58. Over the past 10 years, this metric has ranged from a low of 12.69 to a high of 46.40. The Asset Management industry median Gross Margin % is 58.40. Avanta Serviced Office Group's value of 15.79% is 73% below this industry median.
How does Avanta Serviced Office Group's Gross Margin % compare to AINC and HCAP?
Avanta Serviced Office Group's Gross Margin % of 15.79% can be compared against companies in the Asset Management industry. The industry median Gross Margin % is 58.40. Avanta Serviced Office Group's value of 15.79% is 73% below this benchmark. Historically, Avanta Serviced Office Group's own Gross Margin % has ranged from 12.69 to 46.40 over the past decade. While the company's 10-year median is 30.58 vs. the industry median of 58.40, Avanta Serviced Office Group 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 an Asset Management company?
The median Gross Margin % among Asset Management companies is 58.40, based on 553 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. Avanta Serviced Office Group's current Gross Margin % of 15.79% is 73% 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 Avanta Serviced Office Group and its competitors. For the Asset Management industry, the median Gross Margin % is 58.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Avanta Serviced Office Group's current Gross Margin % is 15.79%, which is 48% below median its own 10-year median of 30.58. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Avanta Serviced Office Group stock overvalued right now?
Avanta Serviced Office Group (LSE:ASOA) has a current Gross Margin % of 15.79%. The current Gross Margin % is 15.79%, which is 48% below median its 10-year median of 30.58 and 73% below the Asset Management industry median of 58.40. 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 Avanta Serviced Office Group (LSE:ASOA), the current Gross Margin % is 15.79% 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.
Serviced Office Group PLC is engaged in the ownership and operation of serviced office accommodation. Its reportable segments are Serviced office business and Managed serviced offices. Serviced office business undertaken in the group's freehold and leasehold properties; and Managed serviced office business undertaken under management contracts on behalf of third parties. The Group operates solely from the UK.
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