PNWNEUTRAL

Gross Margin

37.9%

Higher than 27% of Utilities sector peers

Updated 124h ago

Sector Performance

27th percentile

PNW

37.9%

Sector Median

43.3%

Sector Avg

46.7%

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Deep Analysis

Gross margin measures the percentage of revenue a company retains after paying the direct costs of producing its goods or services; Pinnacle West’s current 37.9% means it keeps $0.379 of every dollar of revenue after covering those costs.

That figure sits below the utilities sector median of 43.2% and places the company in the 27th percentile among sector peers, indicating weaker cost efficiency than the majority of its competitors. The year-over-year change is not available, but the quarter-over-quarter drop of -38.9% (from 62.0% to 37.9%) signals a sharp recent compression in margins. When a gross margin is both below the peer median and falling sharply quarter over quarter, the combination suggests elevated near-term risk from rising input costs or pricing pressure. This metric contradicts the overall NEUTRAL verdict because the weak level and negative trend point to a potential deterioration in profitability that warrants closer attention.

Frequently Asked Questions

What does the Gross Margin tell investors about PNW?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does PNW's Gross Margin compare to its sector?

PNW's Gross Margin of 37.9% compares to a Utilities sector median of 43.3%, placing it in the 27th percentile.

Who are PNW's closest peers by Gross Margin?

The closest Utilities peers by Gross Margin include: PPL (43.9%), LNT (42.6%), ATO (46.0%), PCG (39.8%), PEG (36.5%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.