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
Speed Commerce had a gross margin of 2.95% for the quarter that ended in Dec. 2015 => 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.
Speed Commerce Gross Margin % Related Terms
Speed Commerce Gross Margin % Historical Data
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The historical data trend for Speed Commerce'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.
SPDC vs RMDM, BVTK, LAAB: Gross Margin % Comparison
For the Software - Application subindustry, Speed Commerce'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.
Speed Commerce Gross Margin % vs Software Industry
For the Software industry and Technology sector, Speed Commerce's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Speed Commerce'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.
Speed Commerce (SPDC) has a Gross Margin % of 2.95% as of Dec. 2015. Gross margin is the ratio of total gross profit to net sales. View historical data on Speed Commerce and its competitors.
Is Speed Commerce's Gross Margin % too high?
Speed Commerce's current Gross Margin % is 2.95%. The Software industry median Gross Margin % is 40.45. Speed Commerce's value of 2.95% is 92.7% below this industry median.
How does Speed Commerce's Gross Margin % compare to RMDM and BVTK?
Speed Commerce's Gross Margin % of 2.95% can be compared against companies in the Software industry. The industry median Gross Margin % is 40.45. Speed Commerce's value of 2.95% is 92.7% below this benchmark. 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 2,685 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. Speed Commerce's current Gross Margin % of 2.95% is 92.7% 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 Speed Commerce 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. Speed Commerce's current Gross Margin % is 2.95%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Speed Commerce stock overvalued right now?
Speed Commerce (SPDC) has a current Gross Margin % of 2.95%. The current Gross Margin % is 2.95% and 92.7% below the Software industry median of 40.45. 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 Speed Commerce (SPDC), the current Gross Margin % is 2.95% as of Dec. 2015. 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.
Speed Commerce Inc is a provider of flexible end-to-end e-commerce services to retailers and manufacturers. It provides Web platform development and hosting, order management, fulfillment, logistics and contact center services, which provide clients with transaction-based services and information management tools. It manages fulfillment center from four facilities located in Pennsylvania, Ohio, Missouri, and Texas, utilizing automation technology, such as unit sortation, pick-to-pack conveyors and radio frequency (RF) scanning.
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