Digital Hearts Holdings Co (TSE:3676) 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
Digital Hearts Holdings Co had a gross margin of 23.91% 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.
Digital Hearts Holdings Co Gross Margin % Related Terms
Digital Hearts Holdings Co 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.
TSE:3676 vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, Digital Hearts Holdings Co'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.
Digital Hearts Holdings Co Gross Margin % vs Software Industry
For the Software industry and Technology sector, Digital Hearts Holdings Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Digital Hearts Holdings Co'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.
Digital Hearts Holdings Co (TSE:3676) has a Gross Margin % of 23.91% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Digital Hearts Holdings Co and its competitors. This is 16% below median its historical median of 28.38. Over the past decade, Digital Hearts Holdings Co's Gross Margin % has ranged from 25.50 to 29.18. According to the industry distribution chart, Digital Hearts Holdings Co ranks #1874 out of 2677 companies in the Software industry, placing it in the top 70%.
Is Digital Hearts Holdings Co's Gross Margin % too high?
Digital Hearts Holdings Co's current Gross Margin % of 23.91% is 16% below median its 10-year median of 28.38. Over the past 10 years, this metric has ranged from a low of 25.50 to a high of 29.18. The Software industry median Gross Margin % is 40.49. Digital Hearts Holdings Co's value of 23.91% is 40.9% below this industry median. Based on the distribution chart, Digital Hearts Holdings Co ranks #1874 out of 2677 companies in the Software industry, which is below the industry midpoint. Overall, Digital Hearts Holdings Co has a GF Score™ of 74/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Digital Hearts Holdings Co's Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Digital Hearts Holdings Co ranks #1874 out of 2677 companies for Gross Margin %. This places Digital Hearts Holdings Co in the lower half of its industry. The industry median Gross Margin % is 40.49. Digital Hearts Holdings Co's value of 23.91% is 40.9% below this benchmark. Historically, Digital Hearts Holdings Co's own Gross Margin % has ranged from 25.50 to 29.18 over the past decade. While the company's 10-year median is 28.38 vs. the industry median of 40.49, Digital Hearts Holdings Co 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 40.49, based on 2,677 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. Digital Hearts Holdings Co's current Gross Margin % of 23.91% is 40.9% 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 Digital Hearts Holdings Co and its competitors. For the Software industry, the median Gross Margin % is 40.49 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Digital Hearts Holdings Co's current Gross Margin % is 23.91%, which is 16% below median its own 10-year median of 28.38. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Digital Hearts Holdings Co stock overvalued right now?
Based on GuruFocus' analysis, Digital Hearts Holdings Co (TSE:3676) is currently considered Modestly Undervalued. The stock's GF Value™ is 円959.29, compared to a current price of 円730.00 — trading 23.9% below its estimated fair value. The current Gross Margin % is 23.91%, which is 16% below median its 10-year median of 28.38 and 40.9% below the Software industry median of 40.49. Digital Hearts Holdings Co's overall GF Score™ is 74/100 with 3 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 Digital Hearts Holdings Co (TSE:3676), the current Gross Margin % is 23.91% 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 Digital Hearts Holdings Co (TSE:3676) Overvalued in 2026?
Based on GuruFocus' analysis, Digital Hearts Holdings Co stock appears to be undervalued.
The current stock price of 円730.00 is trading 23.9% below its estimated GF Value™ of 円959.29.
GuruFocus considers Digital Hearts Holdings Co to be Modestly Undervalued.
Key valuation signals for TSE:3676:
Gross Margin %: 23.91% (16% below median its 10-year median of 28.38)
GF Value™: 円959.29 vs. price of 円730.00 (23.9% below fair value)
Industry Position: 40.9% below the Software median (#1874 of 2677)
No single metric tells the full story. See the TSE:3676 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Digital Hearts Holdings Co Ltd is a Japan-based company engaged in Entertainment Business and Enterprise Business. Its Entertainment business is involved in Debugging Business, Media Business and Creative Business. Its Enterprise Business is involved in Testing and Monitoring, Security and System Development.
74GF Score
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