PDF SolutionsPDFS +5.02%77 Gross Margin % is 71.83% as of Mar. 2026, which is 19% above its 10-year median of 60.55. GuruFocus rates PDFS with a GF Score™ of 77/100 and a GF Value™ of $41.59 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 2,683 Software companies, PDF Solutions ranks better than 81.81% on this metric.
The historical rank and industry rank for PDF Solutions's Gross Margin % or its related term are showing as below:
PDFS'
s Gross Margin % Range Over the Past 10 Years
Min: 50.11 Med: 60.55 Max: 72.32
Current: 72.08
During the past 13 years, the highestGross Margin % of PDF Solutions was 72.32%. The lowest was 50.11%. And the median was 60.55%.
PDFS's Gross Margin % is ranked better than 81.81% of 2683
companies
in the Software industry
Industry Median: 40.45
vs PDFS: 72.08
PDF Solutions had a gross margin of 71.83% for the quarter that ended in Mar. 2026 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for PDF Solutions was 4.50% per year.
PDF Solutions (NAS:PDFS) 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
PDF Solutions had a gross margin of 71.83% 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.
PDF Solutions Gross Margin % Related Terms
PDF Solutions Gross Margin % Historical Data
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The historical data trend for PDF Solutions'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.
PDFS vs SPSC, EVCM, ALKT: Gross Margin % Comparison
For the Software - Application subindustry, PDF Solutions'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.
PDF Solutions Gross Margin % vs Software Industry
For the Software industry and Technology sector, PDF Solutions's Gross Margin % distribution charts can be found below:
* The bar in red indicates where PDF Solutions'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.
PDF Solutions (PDFS) has a Gross Margin % of 71.83% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on PDF Solutions and its competitors. This is 19% above median its historical median of 60.55. Over the past decade, PDF Solutions' Gross Margin % has ranged from 50.11 to 72.32. According to the industry distribution chart, PDF Solutions ranks #488 out of 2683 companies in the Software industry, placing it in the top 18.2%.
Is PDF Solutions' Gross Margin % too high?
PDF Solutions' current Gross Margin % of 71.83% is 19% above median its 10-year median of 60.55. Over the past 10 years, this metric has ranged from a low of 50.11 to a high of 72.32. The Software industry median Gross Margin % is 40.45. PDF Solutions' value of 71.83% is 77.6% above this industry median. Based on the distribution chart, PDF Solutions ranks #488 out of 2683 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, PDF Solutions has a GF Score™ of 77/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does PDF Solutions' Gross Margin % compare to SPSC and EVCM?
According to the Software industry distribution chart, PDF Solutions ranks #488 out of 2683 companies for Gross Margin %. This places PDF Solutions in the top 18% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 40.45. PDF Solutions' value of 71.83% is 77.6% above this benchmark. Historically, PDF Solutions' own Gross Margin % has ranged from 50.11 to 72.32 over the past decade. While the company's 10-year median is 60.55 vs. the industry median of 40.45, PDF Solutions 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 2,683 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. PDF Solutions's current Gross Margin % of 71.83% is 77.6% 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 PDF Solutions 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. PDF Solutions's current Gross Margin % is 71.83%, which is 19% above median its own 10-year median of 60.55. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is PDF Solutions stock overvalued right now?
Based on GuruFocus' analysis, PDF Solutions (PDFS) is currently considered Significantly Overvalued. The stock's GF Value™ is $41.59, compared to a current price of $63.61 — trading 52.9% above its estimated fair value. The current Gross Margin % is 71.83%, which is 19% above median its 10-year median of 60.55 and 77.6% above the Software industry median of 40.45. PDF Solutions' overall GF Score™ is 77/100 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 PDF Solutions (PDFS), the current Gross Margin % is 71.83% 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 PDF Solutions (PDFS) Overvalued in 2026?
Based on GuruFocus' analysis, PDF Solutions stock appears to be overvalued.
The current stock price of $63.61 is trading 52.9% above its estimated GF Value™ of $41.59.
GuruFocus considers PDF Solutions to be Significantly Overvalued.
Key valuation signals for PDFS:
Gross Margin %: 71.83% (19% above median its 10-year median of 60.55)
GF Value™: $41.59 vs. price of $63.61 (52.9% above fair value)
Industry Position: 77.6% above the Software median (#488 of 2683)
No single metric tells the full story. See the PDFS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
PDF Solutions Inc provides products and services designed to empower organizations across the semiconductor and electronics ecosystem to connect, collect, manage, and analyze data about design, equipment, manufacturing, and test to improve the yield and quality of their products and operational efficiency. The Company's products, services, and solutions include proprietary software, physical intellectual property (IP) for integrated circuit (IC) designs, electrical measurement hardware tools, methodologies, and professional services.
77GF Score
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