Gross margin

Gross margin is revenue minus the direct cost of making the product, as a percent of revenue. It shows pricing power, and a falling one on results day can sink a stock that beat on revenue. Rising input prices squeeze it, which is why consumer companies get asked whether they passed costs on.

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In MochaLearnLearn how to read US earnings
  • RevenueRevenue is the total money a company takes in from sales before any costs, the top line. Growth companies are judged…
  • Consensus estimateThe consensus estimate is the average analyst forecast for a company's earnings or an economic number. Markets price…
  • Operating marginOperating margin is operating profit as a percent of revenue: what is left after making the product and running the…
  • Forward P/EForward P/E is the share price divided by the earnings analysts expect over the next twelve months. It is built on a…
  • Whisper numberThe whisper number is the unofficial earnings figure traders actually expect, usually above the published consensus…
  • TariffA tariff is a tax on imports. In the US the president can set many of them alone, effective the moment they are…

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