TMONEUTRAL

TMO Gross Margin Analysis

40.7%

Updated 275h ago·SEC filings & market data

Key Takeaway

Gross margin measures the percentage of revenue a company keeps after paying direct production costs, so TMO's 40.7% means it retains that share from each dollar of sales before other expenses.

Sector Performance

41th percentile

TMO

40.7%

Sector Median

46.6%

Sector Avg

47.6%

Prior Period

40.3%(Jul 2026)

→ Stable

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Deep Analysis

Gross margin measures the percentage of revenue a company keeps after paying direct production costs, so TMO's 40.7% means it retains that share from each dollar of sales before other expenses.

This sits below the sector median of 46.4%, placing TMO at the 42nd percentile among its peers, indicating a slightly below-average cost structure within its industry. The year-over-year change is N/A, but quarter-over-quarter the margin improved by +1.0 percentage point, moving from 40.3% to 40.7% in the most recent period. Since the level is below the sector norm yet showing a positive quarterly tick, the near-term risk is moderate: the firm has room to catch up with peers, but the improvement is too narrow to signal a structural shift. The combination of a sub-median margin and only a one-quarter gain suggests a limited upside opportunity unless the trend continues over multiple quarters. This metric neither strongly supports nor contradicts the overall NEUTRAL verdict, as the level is a mild negative while the quarterly direction offers a slight positive, leaving the stock in a balanced position.

Frequently Asked Questions

What does the Gross Margin tell investors about TMO?

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.

Who are TMO's closest peers by Gross Margin?

The closest peers by Gross Margin include: HII (12.6%), VLO (12.3%), EXPD (12.3%), LMT (12.2%), EPD (12.1%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

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.