Management Consulting Group (LSE:MMC) 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
Management Consulting Group had a gross margin of 50.02% for the quarter that ended in Dec. 2019 => Durable 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.
Management Consulting Group Gross Margin % Related Terms
Management Consulting 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:MMC vs INFO, VRSK, EFX: Gross Margin % Comparison
For the Consulting Services subindustry, Management Consulting 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.
Management Consulting Group Gross Margin % vs Business Services Industry
For the Business Services industry and Industrials sector, Management Consulting Group's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Management Consulting 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.
Management Consulting Group (LSE:MMC) has a Gross Margin % of 50.02% as of Dec. 2019. Gross margin is the ratio of total gross profit to net sales. View historical data on Management Consulting Group and its competitors. This is 13% above median its historical median of 44.15. Over the past decade, Management Consulting Group's Gross Margin % has ranged from 34.05 to 50.59.
Is Management Consulting Group's Gross Margin % too high?
Management Consulting Group's current Gross Margin % of 50.02% is 13% above median its 10-year median of 44.15. Over the past 10 years, this metric has ranged from a low of 34.05 to a high of 50.59. The Business Services industry median Gross Margin % is 34.50. Management Consulting Group's value of 50.02% is 45% above this industry median.
How does Management Consulting Group's Gross Margin % compare to INFO and VRSK?
Management Consulting Group's Gross Margin % of 50.02% can be compared against companies in the Business Services industry. The industry median Gross Margin % is 34.50. Management Consulting Group's value of 50.02% is 45% above this benchmark. Historically, Management Consulting Group's own Gross Margin % has ranged from 34.05 to 50.59 over the past decade. While the company's 10-year median is 44.15 vs. the industry median of 34.50, Management Consulting Group 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 a Business Services company?
The median Gross Margin % among Business Services companies is 34.50, based on 1,007 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. Management Consulting Group's current Gross Margin % of 50.02% is 45% 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 Management Consulting Group and its competitors. For the Business Services industry, the median Gross Margin % is 34.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Management Consulting Group's current Gross Margin % is 50.02%, which is 13% above median its own 10-year median of 44.15. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Management Consulting Group stock overvalued right now?
Based on GuruFocus' analysis, Management Consulting Group (LSE:MMC) is currently considered Possible Value Trap. The current Gross Margin % is 50.02%, which is 13% above median its 10-year median of 44.15 and 45% above the Business Services industry median of 34.50. 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 Management Consulting Group (LSE:MMC), the current Gross Margin % is 50.02% as of Dec. 2019. 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.
Management Consulting Group PLC is engaged in providing professional services to various industries and sectors via the Proudfoot practice. Proudfoot, which is a professional service practice designs, implements and accelerates the operational transformation that realizes tomorrow's results today. The company serves various industries including manufacturing, natural resources, consumer packaged goods, transportation, automotive, building materials and heavy industry. It also provides market-specific local customization for Financial Services and Healthcare sectors. The company provides its services in the Americas, Europe among other regions, and generates a vast majority of its revenue from Europe.
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