Tencent HoldingsLTS:0LEA -0.13%80 Gross Margin % is 56.64% as of Mar. 2026, which is 20% above its 10-year median of 47.04. GuruFocus rates LTS:0LEA with a GF Score™ of 80/100 and a GF Value™ of $67.46 (Modestly Undervalued). Among 497 Interactive Media companies, Tencent Holdings ranks worse than 55.33% on this metric.
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
Tencent Holdings had a gross margin of 56.64% for the quarter that ended in Mar. 2026 => 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.
Tencent Holdings Gross Margin % Related Terms
Tencent Holdings Gross Margin % Historical Data
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The historical data trend for Tencent 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.
LTS:0LEA vs GOOGL, META, SPOT: Gross Margin % Comparison
For the Internet Content & Information subindustry, Tencent 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.
Tencent Holdings Gross Margin % vs Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Tencent Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Tencent 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.
Tencent Holdings (LTS:0LEA) has a Gross Margin % of 56.64% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Tencent Holdings and its competitors. This is 20% above median its historical median of 47.04. Over the past decade, Tencent Holdings' Gross Margin % has ranged from 43.05 to 56.41. According to the industry distribution chart, Tencent Holdings ranks #275 out of 497 companies in the Interactive Media industry, placing it in the top 55.3%.
Is Tencent Holdings' Gross Margin % too high?
Tencent Holdings' current Gross Margin % of 56.64% is 20% above median its 10-year median of 47.04. Over the past 10 years, this metric has ranged from a low of 43.05 to a high of 56.41. The Interactive Media industry median Gross Margin % is 62.58. Tencent Holdings' value of 56.64% is 9.5% below this industry median. Based on the distribution chart, Tencent Holdings ranks #275 out of 497 companies in the Interactive Media industry, which is below the industry midpoint. Overall, Tencent Holdings has a GF Score™ of 80/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Tencent Holdings' Gross Margin % compare to GOOGL and META?
According to the Interactive Media industry distribution chart, Tencent Holdings ranks #275 out of 497 companies for Gross Margin %. This places Tencent Holdings in the lower half of its industry. The industry median Gross Margin % is 62.58. Tencent Holdings' value of 56.64% is 9.5% below this benchmark. Historically, Tencent Holdings' own Gross Margin % has ranged from 43.05 to 56.41 over the past decade. While the company's 10-year median is 47.04 vs. the industry median of 62.58, Tencent Holdings 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 Interactive Media company?
The median Gross Margin % among Interactive Media companies is 62.58, based on 497 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. Tencent Holdings's current Gross Margin % of 56.64% is 9.5% 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 Tencent Holdings and its competitors. For the Interactive Media industry, the median Gross Margin % is 62.58 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Tencent Holdings's current Gross Margin % is 56.64%, which is 20% above median its own 10-year median of 47.04. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Tencent Holdings stock overvalued right now?
Based on GuruFocus' analysis, Tencent Holdings (LTS:0LEA) is currently considered Modestly Undervalued. The stock's GF Value™ is $67.46, compared to a current price of $53.24 — trading 21.1% below its estimated fair value. The current Gross Margin % is 56.64%, which is 20% above median its 10-year median of 47.04 and 9.5% below the Interactive Media industry median of 62.58. Tencent Holdings' overall GF Score™ is 80/100. 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 Tencent Holdings (LTS:0LEA), the current Gross Margin % is 56.64% as of Mar. 2026. 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 Tencent Holdings (LTS:0LEA) Overvalued in 2026?
Based on GuruFocus' analysis, Tencent Holdings stock appears to be undervalued.
The current stock price of $53.24 is trading 21.1% below its estimated GF Value™ of $67.46.
GuruFocus considers Tencent Holdings to be Modestly Undervalued.
Key valuation signals for LTS:0LEA:
Gross Margin %: 56.64% (20% above median its 10-year median of 47.04)
GF Value™: $67.46 vs. price of $53.24 (21.1% below fair value)
Industry Position: 9.5% below the Interactive Media median (#275 of 497)
No single metric tells the full story. See the LTS:0LEA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Tencent is the world's largest game publisher, with top-grossing mobile hits like Honor of Kings and Peacekeeper Elite and a steady pipeline of new titles. It also operates WeChat-China's super-app with roughly 1.3 billion users-embedded in daily life for messaging, short video, mini programs, payments, and shopping. Beyond its own platforms, Tencent is a prolific strategic investor, holding stakes in leading internet companies such as PDD, Kuaishou, and Xiaohongshu.
80GF Score
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