18.83 
(2.59%) Volume: 1,310 Apr. 06| Market Cap : 3.29 B | Enterprise Value : 3.31 B | P/E (TTM) : 8.81 | P/B : 0.70 |
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Gross Margin % is calculated as gross profit divided by its revenue. 1&1 Drillisch AG's Gross Profit for the three months ended in Dec. 2019 was €282 Mil. 1&1 Drillisch AG's Revenue for the three months ended in Dec. 2019 was €920 Mil. Therefore, 1&1 Drillisch AG's Gross Margin % for the quarter that ended in Dec. 2019 was 30.67%.
Warning Sign:
1&1 Drillisch AG gross margin has been in long term decline. The average rate of decline per year is -9.1%.
During the past 13 years, the highest Gross Margin % of 1&1 Drillisch AG was 49.85%. The lowest was 24.94%. And the median was 31.67%.
1&1 Drillisch AG had a gross margin of 30.67% for the quarter that ended in Dec. 2019 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for 1&1 Drillisch AG was -9.10% per year.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| 1&1 Drillisch AG Quarterly Data | ||||||||||||||||||||
| Mar15 | Jun15 | Sep15 | Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | |
| Gross Margin % |
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32.91 | 29.56 | 29.94 | 29.59 | 30.67 |
* The bar in red indicates where 1&1 Drillisch AG's Gross Margin % falls into.
Gross Margin is the percentage of Gross Profit out of sales or Revenue.
1&1 Drillisch AG's Gross Margin for the fiscal year that ended in Dec. 2019 is calculated as
| Gross Margin % (A: Dec. 2019 ) | = | Gross Profit (A: Dec. 2019 ) | / | Revenue (A: Dec. 2019 ) |
| = | 1100.2 | / | 3674.9 | |
| = | (Revenue - Cost of Goods Sold) | / | Revenue | |
| = | (3674.9 - 2574.677) | / | 3674.9 | |
| = | 29.94 % |
1&1 Drillisch AG's Gross Margin for the quarter that ended in Dec. 2019 is calculated as
| Gross Margin % (Q: Dec. 2019 ) | = | Gross Profit (Q: Dec. 2019 ) | / | Revenue (Q: Dec. 2019 ) |
| = | -637.5 | / | 919.574 | |
| = | (Revenue - Cost of Goods Sold) | / | Revenue | |
| = | (919.574 - 637.51) | / | 919.574 | |
| = | 30.67 % |
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.
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
1&1 Drillisch AG had a gross margin of 30.67% for the quarter that ended in Dec. 2019 => Competition eroding margins
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.
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