Telephone and Data SystemsTDS -0.99%64 Gross Margin % is 59.77% as of Mar. 2026, which is 11% above its 10-year median of 53.95. GuruFocus rates TDS with a GF Score™ of 64/100 and a GF Value™ of $32.86 (Modestly Overvalued). The stock has 5 warning signs investors should review. Among 344 Telecommunication Services companies, Telephone and Data Systems ranks better than 62.79% on this metric.
Telephone and Data Systems (NYSE:TDS) 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
Telephone and Data Systems had a gross margin of 59.77% 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.
Telephone and Data Systems Gross Margin % Related Terms
Telephone and Data Systems 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.
TDS vs AD, LBTYA, LBRDA: Gross Margin % Comparison
For the Telecom Services subindustry, Telephone and Data Systems'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.
Telephone and Data Systems Gross Margin % vs Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, Telephone and Data Systems's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Telephone and Data Systems'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.
Telephone and Data Systems (TDS) has a Gross Margin % of 59.77% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Telephone and Data Systems and its competitors. This is 11% above median its historical median of 53.95. Over the past decade, Telephone and Data Systems' Gross Margin % has ranged from 49.18 to 59.06. According to the industry distribution chart, Telephone and Data Systems ranks #128 out of 344 companies in the Telecommunication Services industry, placing it in the top 37.2%.
Is Telephone and Data Systems' Gross Margin % too high?
Telephone and Data Systems' current Gross Margin % of 59.77% is 11% above median its 10-year median of 53.95. Over the past 10 years, this metric has ranged from a low of 49.18 to a high of 59.06. The Telecommunication Services industry median Gross Margin % is 51.42. Telephone and Data Systems' value of 59.77% is 16.3% above this industry median. Based on the distribution chart, Telephone and Data Systems ranks #128 out of 344 companies in the Telecommunication Services industry, which is above the industry midpoint. Overall, Telephone and Data Systems has a GF Score™ of 64/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Telephone and Data Systems' Gross Margin % compare to AD and LBTYA?
According to the Telecommunication Services industry distribution chart, Telephone and Data Systems ranks #128 out of 344 companies for Gross Margin %. This puts Telephone and Data Systems in the upper half of its industry. The industry median Gross Margin % is 51.42. Telephone and Data Systems' value of 59.77% is 16.3% above this benchmark. Historically, Telephone and Data Systems' own Gross Margin % has ranged from 49.18 to 59.06 over the past decade. While the company's 10-year median is 53.95 vs. the industry median of 51.42, Telephone and Data Systems 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 Telecommunication Services company?
The median Gross Margin % among Telecommunication Services companies is 51.42, based on 344 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. Telephone and Data Systems's current Gross Margin % of 59.77% is 16.3% 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 Telephone and Data Systems and its competitors. For the Telecommunication Services industry, the median Gross Margin % is 51.42 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Telephone and Data Systems's current Gross Margin % is 59.77%, which is 11% above median its own 10-year median of 53.95. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Telephone and Data Systems stock overvalued right now?
Based on GuruFocus' analysis, Telephone and Data Systems (TDS) is currently considered Modestly Overvalued. The stock's GF Value™ is $32.86, compared to a current price of $37.18 — trading 13.1% above its estimated fair value. The current Gross Margin % is 59.77%, which is 11% above median its 10-year median of 53.95 and 16.3% above the Telecommunication Services industry median of 51.42. Telephone and Data Systems' overall GF Score™ is 64/100 with 5 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 Telephone and Data Systems (TDS), the current Gross Margin % is 59.77% 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 Telephone and Data Systems (TDS) Overvalued in 2026?
Based on GuruFocus' analysis, Telephone and Data Systems stock appears to be overvalued.
The current stock price of $37.18 is trading 13.1% above its estimated GF Value™ of $32.86.
GuruFocus considers Telephone and Data Systems to be Modestly Overvalued.
Key valuation signals for TDS:
Gross Margin %: 59.77% (11% above median its 10-year median of 53.95)
GF Value™: $32.86 vs. price of $37.18 (13.1% above fair value)
Industry Position: 16.3% above the Telecommunication Services median (#128 of 344)
No single metric tells the full story. See the TDS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Telephone and Data Systems Inc is a diversified telecommunications operator that provides communications services to customers through broadband, video, voice, and wireless connections. The company has two reportable segments: TDS Telecom and Array. The majority of its revenue is generated from the TDS Telecom segment, which generates revenue by providing broadband, video, voice, and wireless services. The Array segment generates its revenue mainly by leasing tower space on Array-owned towers to customers.
64GF Score
Get the complete analysis for TDS
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