Gross Margin % is calculated as gross profit divided by its revenue. Premier's Gross Profit for the
three
months ended in Dec. 2023 was $221 Mil. Premier's Revenue for the
three
months ended in Dec. 2023 was $335 Mil. Therefore, Premier's Gross Margin % for the quarter that ended in Dec. 2023 was 66.10%.
Warning Sign:
Premier Inc gross margin has been in long-term decline. The average rate of decline per year is -2.9%.
The historical rank and industry rank for Premier's Gross Margin % or its related term are showing as below:
PINC'
s Gross Margin % Range Over the Past 10 Years
Min: 48.65 Med: 66.46 Max: 71.13
Current: 67.13
During the past 13 years, the highestGross Margin % of Premier was 71.13%. The lowest was 48.65%. And the median was 66.46%.
PINC's Gross Margin % is ranked better than 75.78% of 607
companies
in the Healthcare Providers & Services industry
Industry Median: 41.4
vs PINC: 67.13
Premier had a gross margin of 66.10% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Premier was -2.90% per year.
Premier Gross Margin % Historical Data
The historical data trend for Premier'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.
For the Health Information Services subindustry, Premier'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.
Premier Gross Margin % Distribution
For the Healthcare Providers & Services industry and Healthcare sector, Premier's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Premier'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.
Premier (NAS:PINC) 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
Premier had a gross margin of 66.10% for the quarter that ended in Dec. 2023 => 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.
Premier Gross Margin % Related Terms
Thank you for viewing the detailed overview of Premier's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Premier Inc is a Charlotte, North Carolina-based national group purchasing organization providing primary supply chain services to large hospital systems and more recently to alternate outpatient locations as it expands its footprint. Through acquisitions, the company also offers a compliment of advisory services and consulting services along with software-as-a-service-based subscriptions. The company's revenue is all sourced domestically and is reported in two business segments: the core supply chain services (approximately 70% of fiscal 2019 revenue) and the consulting and technology platform of performance services (approximately 30%).
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