Gross margin stability (GM stability)
The standard deviation of the gross margin across the filed years. Lower means steadier.
A margin that holds through a downturn is evidence of pricing power that a single good year is not.
How it is computed here
Standard deviation of annual gross margin over the available filed years
Computed across several filed fiscal years. Filed under quality. Lower is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Lower is better here, which is the opposite of most figures on the page.
- A company with a short filed history can look artificially stable.
- A steadily rising margin is penalised as instability even though it is good news.
Questions
How is gross margin stability calculated?
Standard deviation of annual gross margin over the available filed years. Computed across several filed fiscal years.
What does gross margin stability tell a value investor?
A margin that holds through a downturn is evidence of pricing power that a single good year is not.
When does gross margin stability mislead?
Lower is better here, which is the opposite of most figures on the page. A company with a short filed history can look artificially stable. A steadily rising margin is penalised as instability even though it is good news.