Source: https://mochatrade.com/learn/glossary/gross-margin

# Gross margin
URL: https://mochatrade.com/learn/glossary/gross-margin
Last modified: 2026-10-17

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](https://mochatrade.com/learn/us-market-structure/us-earnings-explained) can sink a stock that beat on revenue. [Rising input prices](https://mochatrade.com/learn/us-market-structure/us-inflation-explained) squeeze it, which is why [consumer companies get asked whether they passed costs on](https://mochatrade.com/blog/mocha-markets-weekly-019).

## Related terms

- Revenue: https://mochatrade.com/learn/glossary/revenue
- Consensus estimate: https://mochatrade.com/learn/glossary/consensus-estimate
- Operating margin: https://mochatrade.com/learn/glossary/operating-margin
- Forward P/E: https://mochatrade.com/learn/glossary/forward-p-e
- Whisper number: https://mochatrade.com/learn/glossary/whisper-number
- Tariff: https://mochatrade.com/learn/glossary/tariff