Gross margin: what it is and how to read it
Gross margin is what is left of each sale after paying the direct cost of what was sold: raw materials, manufacturing or goods. It shows how much what the company sells is worth above what it costs to make.
How it is calculated
Gross margin = (revenue − cost of sales) / revenue.
How to read it
A high gross margin (over 50%) usually points to a brand, technology or pricing power: software, luxury, pharma. A low one is normal in distribution, supermarkets or commodities, which live on volume.
Gross margin in the MeridIAn ranking
Among the 2,121 companies in the ranking with data, the median Gross margin is 41.7%: half are below and half above. The lowest 25% are below 23.8% and the highest 25% above 61.9%.
For example: NVIDIA, 74.7%; Apple, 48.7%; Alphabet, 60.9%; Banco Santander, 0.0%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 37.6% | 141 |
| Communication Services | 51.6% | 102 |
| Consumer Cyclical | 38.2% | 227 |
| Consumer Defensive | 37.0% | 124 |
| Energy | 40.5% | 102 |
| Financial Services | 25.1% | 350 |
| Healthcare | 57.2% | 215 |
| Industrials | 33.5% | 387 |
| Real Estate | 68.9% | 99 |
| Technology | 52.9% | 282 |
| Utilities | 44.8% | 92 |
Highest Gross margin
What to watch out for
The trend matters more than the level: a gross margin falling year after year often warns of more competition or costs the company cannot pass on.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.