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
PGS Software had a gross margin of 98.16% for the quarter that ended in Sep. 2021 => 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.
PGS Software Gross Margin % Related Terms
PGS Software Gross Margin % Historical Data
* Premium members only.
The historical data trend for PGS Software'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:0RK2 vs CRM, INTU, NOW: Gross Margin % Comparison
For the Software - Application subindustry, PGS Software'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.
PGS Software Gross Margin % vs Software Industry
For the Software industry and Technology sector, PGS Software's Gross Margin % distribution charts can be found below:
* The bar in red indicates where PGS Software'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.
PGS Software (LTS:0RK2) has a Gross Margin % of 98.16% as of Sep. 2021. Gross margin is the ratio of total gross profit to net sales. View historical data on PGS Software and its competitors. This is near median its historical median of 98.09. Over the past decade, PGS Software's Gross Margin % has ranged from 97.44 to 98.64.
Is PGS Software's Gross Margin % too high?
PGS Software's current Gross Margin % of 98.16% is near median its 10-year median of 98.09. Over the past 10 years, this metric has ranged from a low of 97.44 to a high of 98.64. The Software industry median Gross Margin % is 40.45. PGS Software's value of 98.16% is 142.7% above this industry median. Overall, PGS Software has a GF Score™ of 4/100, reflecting its overall financial health beyond just this single metric.
How does PGS Software's Gross Margin % compare to CRM and INTU?
PGS Software's Gross Margin % of 98.16% can be compared against companies in the Software industry. The industry median Gross Margin % is 40.45. PGS Software's value of 98.16% is 142.7% above this benchmark. Historically, PGS Software's own Gross Margin % has ranged from 97.44 to 98.64 over the past decade. While the company's 10-year median is 98.09 vs. the industry median of 40.45, PGS Software 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 Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,680 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. PGS Software's current Gross Margin % of 98.16% is 142.7% 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 PGS Software and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PGS Software's current Gross Margin % is 98.16%, which is near median its own 10-year median of 98.09. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is PGS Software stock overvalued right now?
PGS Software (LTS:0RK2) has a current Gross Margin % of 98.16%. The current Gross Margin % is 98.16%, which is near median its 10-year median of 98.09 and 142.7% above the Software industry median of 40.45. PGS Software's overall GF Score™ is 4/100 with 6 warning signs to review. 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 PGS Software (LTS:0RK2), the current Gross Margin % is 98.16% as of Sep. 2021. 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.
PGS Software SA provides software development and IT outsourcing services in Poland. It offers nearshore software outsourcing; mobile and web; application development; continuous delivery, quality analysis, and automation; and cloud services.
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