Encourage Technologies CoTSE:3682 75 Gross Margin % is 49.10% as of Mar. 2026, which is 22% below its 10-year median of 62.62. GuruFocus rates TSE:3682 with a GF Score™ of 75/100 and a GF Value™ of 円640.96 (Fairly Valued). The stock has 4 warning signs investors should review. Among 2,677 Software companies, Encourage Technologies Co ranks better than 61.45% on this metric.
Encourage Technologies Co (TSE:3682) 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
Encourage Technologies Co had a gross margin of 49.10% 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.
Encourage Technologies Co Gross Margin % Related Terms
Encourage Technologies 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:3682 vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, Encourage Technologies 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.
Encourage Technologies Co Gross Margin % vs Software Industry
For the Software industry and Technology sector, Encourage Technologies Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Encourage Technologies 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.
Encourage Technologies Co (TSE:3682) has a Gross Margin % of 49.10% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Encourage Technologies Co and its competitors. This is 22% below median its historical median of 62.62. Over the past decade, Encourage Technologies Co's Gross Margin % has ranged from 50.27 to 68.08. According to the industry distribution chart, Encourage Technologies Co ranks #1032 out of 2677 companies in the Software industry, placing it in the top 38.6%.
Is Encourage Technologies Co's Gross Margin % too high?
Encourage Technologies Co's current Gross Margin % of 49.10% is 22% below median its 10-year median of 62.62. Over the past 10 years, this metric has ranged from a low of 50.27 to a high of 68.08. The Software industry median Gross Margin % is 40.49. Encourage Technologies Co's value of 49.10% is 21.3% above this industry median. Based on the distribution chart, Encourage Technologies Co ranks #1032 out of 2677 companies in the Software industry, which is above the industry midpoint. Overall, Encourage Technologies Co has a GF Score™ of 75/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Encourage Technologies Co's Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Encourage Technologies Co ranks #1032 out of 2677 companies for Gross Margin %. This puts Encourage Technologies Co in the upper half of its industry. The industry median Gross Margin % is 40.49. Encourage Technologies Co's value of 49.10% is 21.3% above this benchmark. Historically, Encourage Technologies Co's own Gross Margin % has ranged from 50.27 to 68.08 over the past decade. While the company's 10-year median is 62.62 vs. the industry median of 40.49, Encourage Technologies Co 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 40.49, 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. Encourage Technologies Co's current Gross Margin % of 49.10% is 21.3% 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 Encourage Technologies 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. Encourage Technologies Co's current Gross Margin % is 49.10%, which is 22% below median its own 10-year median of 62.62. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Encourage Technologies Co stock overvalued right now?
Based on GuruFocus' analysis, Encourage Technologies Co (TSE:3682) is currently considered Fairly Valued. The stock's GF Value™ is 円640.96, compared to a current price of 円600.00 — trading 6.4% below its estimated fair value. The current Gross Margin % is 49.10%, which is 22% below median its 10-year median of 62.62 and 21.3% above the Software industry median of 40.49. Encourage Technologies Co's overall GF Score™ is 75/100 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 Encourage Technologies Co (TSE:3682), the current Gross Margin % is 49.10% 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 Encourage Technologies Co (TSE:3682) Overvalued in 2026?
Based on GuruFocus' analysis, Encourage Technologies Co stock appears to be undervalued.
The current stock price of 円600.00 is trading 6.4% below its estimated GF Value™ of 円640.96.
GuruFocus considers Encourage Technologies Co to be Fairly Valued.
Key valuation signals for TSE:3682:
Gross Margin %: 49.10% (22% below median its 10-year median of 62.62)
GF Value™: 円640.96 vs. price of 円600.00 (6.4% below fair value)
Industry Position: 21.3% above the Software median (#1032 of 2677)
No single metric tells the full story. See the TSE:3682 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Encourage Technologies Co Ltd develops software that monitors and audits user activity in IT systems. The company also provides maintenance support after the installation of the software as well consulting services.
75GF Score
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