Profit Margin
Also called: gross margin, net margin, operating margin
The share of revenue a company keeps as profit — gross, operating and net margins show how much survives each layer of costs.
Margins measure profitability as a percent of sales. Gross margin is revenue minus the cost of goods, divided by revenue (how profitable the product is); operating margin subtracts operating expenses; net margin is the bottom line after everything, including taxes and interest. Higher margins mean more profit per dollar of sales and usually a stronger, more defensible business.
Margins are best read as a trend and against peers: expanding margins signal pricing power or efficiency gains, while shrinking margins warn of competition or rising costs. They vary enormously by industry.
On StockSetups
Gross and net margin are screener fields on StockSetups, so you can favor higher-quality, more profitable companies behind a technical setup.
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