ValueGross Margin#28
Analyst Price Target Upside is the metric used to how cheaply a stock trades relative to its fundamentals.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
(Revenue - COGS) / Revenue x 100
Description
Shows pricing power and production efficiency by measuring what percentage of revenue remains after direct costs. Warren Buffett has noted that companies with consistently high gross margins tend to have durable competitive advantages. It is the first line of defense in profitability analysis.
Interpretation
Above 40% generally indicates strong pricing power. Software companies often exceed 70%, while retailers may operate at 25-30%. The trend matters as much as the absolute level. Declining gross margins may signal eroding competitive position.
Related metrics: Price-to-Earnings Ratio TTM (P/E), Forward Price-to-Earnings (Forward P/E), Price-to-Book Ratio (P/B). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Analyst Price Target Upside- Primary source filings used to calculate Analyst Price Target Upside.
FAQ
How is Analyst Price Target Upside calculated?+
Analyst Price Target Upside uses the formula: (Revenue - COGS) / Revenue x 100. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR 10-K filings + Damodaran NYU industry tables.
What is a good Analyst Price Target Upside value by sector?+
There is no single 'good' value for Analyst Price Target Upside — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Analyst Price Target Upside on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Analyst Price Target Upside?+
Warren Buffett, Benjamin Graham, Joel Greenblatt cite Analyst Price Target Upside as a key input to to identify stocks trading below intrinsic value. The academic anchor is Graham (1934) and Damodaran (NYU Stern). ValueMarkers weights this within the Value pillar of the VMCI score (35% of total).
What are the limitations of Analyst Price Target Upside?+
Analyst Price Target Upside can mislead in value traps in declining industries. Pair Analyst Price Target Upside with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Analyst Price Target Upside data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Analyst Price Target Upside data, sector percentiles, and the VMCI composite score that integrates Analyst Price Target Upside with 119 other indicators across 100,000+ stocks. The free /screener exposes Analyst Price Target Upside as a filterable column.
Used in these guides
Related Value Indicators
Price-to-Earnings Ratio TTM (P/E)P/E
P/E measures how cheaply a stock trades relative to its fundamentals. Value investors to identify stocks trading below intrinsic value when P/E aligns with the rest of the VMCI 120-indicator comp.
Forward Price-to-Earnings (Forward P/E)
Forward Price-to-Earnings captures how cheaply a stock trades relative to its fundamentals.
Price-to-Book Ratio (P/B)P/B
P/B expresses how cheaply a stock trades relative to its fundamentals. Value investors to identify stocks trading below intrinsic value when P/B aligns with the rest of the VMCI 120-indicator com.
Price-to-Sales Ratio (P/S)P/S
P/S is the metric used to how cheaply a stock trades relative to its fundamentals.
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