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Softfront HoldingsTSE:2321 -4.00%38 Gross Margin % is 34.07% as of Mar. 2026, which is 20% below its 10-year median of 42.70. GuruFocus rates TSE:2321 with a GF Score™ of 38/100 and a GF Value™ of 円66.56 (Significantly Overvalued). The stock has 4 warning signs investors should review. Among 2,684 Software companies, Softfront Holdings ranks better than 53.99% 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
Softfront Holdings had a gross margin of 34.07% for the quarter that ended in Mar. 2026 => Competition eroding margins
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.
Softfront Holdings Gross Margin % Related Terms
Softfront Holdings Gross Margin % Historical Data
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The historical data trend for Softfront 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.
TSE:2321 vs CRM, SHOP, UBER: Gross Margin % Comparison
For the Software - Application subindustry, Softfront 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.
Softfront Holdings Gross Margin % vs Software Industry
For the Software industry and Technology sector, Softfront Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Softfront 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.
Softfront Holdings (TSE:2321) has a Gross Margin % of 34.07% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Softfront Holdings and its competitors. This is 20% below median its historical median of 42.70. Over the past decade, Softfront Holdings' Gross Margin % has ranged from 30.31 to 63.95. According to the industry distribution chart, Softfront Holdings ranks #1235 out of 2684 companies in the Software industry, placing it in the top 46%.
Is Softfront Holdings' Gross Margin % too high?
Softfront Holdings' current Gross Margin % of 34.07% is 20% below median its 10-year median of 42.70. Over the past 10 years, this metric has ranged from a low of 30.31 to a high of 63.95. The Software industry median Gross Margin % is 40.12. Softfront Holdings' value of 34.07% is 15.1% below this industry median. Based on the distribution chart, Softfront Holdings ranks #1235 out of 2684 companies in the Software industry, which is above the industry midpoint. Overall, Softfront Holdings has a GF Score™ of 38/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Softfront Holdings' Gross Margin % compare to CRM and SHOP?
According to the Software industry distribution chart, Softfront Holdings ranks #1235 out of 2684 companies for Gross Margin %. This puts Softfront Holdings in the upper half of its industry. The industry median Gross Margin % is 40.12. Softfront Holdings' value of 34.07% is 15.1% below this benchmark. Historically, Softfront Holdings' own Gross Margin % has ranged from 30.31 to 63.95 over the past decade. While the company's 10-year median is 42.70 vs. the industry median of 40.12, Softfront 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 a Software company?
The median Gross Margin % among Software companies is 40.12, based on 2,684 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. Softfront Holdings's current Gross Margin % of 34.07% is 15.1% 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 Softfront Holdings and its competitors. For the Software industry, the median Gross Margin % is 40.12 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Softfront Holdings's current Gross Margin % is 34.07%, which is 20% below median its own 10-year median of 42.70. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Softfront Holdings stock overvalued right now?
Based on GuruFocus' analysis, Softfront Holdings (TSE:2321) is currently considered Significantly Overvalued. The stock's GF Value™ is 円66.56, compared to a current price of 円144.00 — trading 116.3% above its estimated fair value. The current Gross Margin % is 34.07%, which is 20% below median its 10-year median of 42.70 and 15.1% below the Software industry median of 40.12. Softfront Holdings' overall GF Score™ is 38/100 with 4 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 Softfront Holdings (TSE:2321), the current Gross Margin % is 34.07% 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 Softfront Holdings (TSE:2321) Overvalued in 2026?
Based on GuruFocus' analysis, Softfront Holdings stock appears to be overvalued.
The current stock price of 円144.00 is trading 116.3% above its estimated GF Value™ of 円66.56.
GuruFocus considers Softfront Holdings to be Significantly Overvalued.
Key valuation signals for TSE:2321:
Gross Margin %: 34.07% (20% below median its 10-year median of 42.70)
GF Value™: 円66.56 vs. price of 円144.00 (116.3% above fair value)
Industry Position: 15.1% below the Software median (#1235 of 2684)
No single metric tells the full story. See the TSE:2321 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Softfront Holdings is engaged in contract development consultation in Japan. It also provides technical assistance for the software development environment that provides the core technology and SIP / VoIP. Its core activity includes communications technology. The group operates in a single segment, the communications platform-related business.
38GF Score
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