American Express Gross Profit vs. Operating Margin

0R3C Stock   296.30  3.38  1.13%   
Based on American Express' profitability indicators, American Express Co may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess American Express' ability to earn profits and add value for shareholders.
 
Gross Profit  
First Reported
1990-03-31
Previous Quarter
11.2 B
Current Value
9.4 B
Quarterly Volatility
2.1 B
 
Oil Shock
 
Dot-com Bubble
 
Housing Crash
 
Credit Downgrade
 
Yuan Drop
 
Covid
For American Express profitability analysis, we use financial ratios and fundamental drivers that measure the ability of American Express to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well American Express Co utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between American Express's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of American Express Co over time as well as its relative position and ranking within its peers.
  
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For more information on how to buy American Stock please use our How to Invest in American Express guide.
Please note, there is a significant difference between American Express' value and its price as these two are different measures arrived at by different means. Investors typically determine if American Express is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, American Express' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

American Express Operating Margin vs. Gross Profit Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining American Express's current stock value. Our valuation model uses many indicators to compare American Express value to that of its competitors to determine the firm's financial worth.
American Express Co is number one stock in gross profit category among its peers. It also is number one stock in operating margin category among its peers . The ratio of Gross Profit to Operating Margin for American Express Co is about  137,421,203,438 . At this time, American Express' Gross Profit is comparatively stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the American Express' earnings, one of the primary drivers of an investment's value.

American Operating Margin vs. Gross Profit

Gross Profit is the most basic measure of business operational efficiency. It is simply the difference between sales revenue and the cost associated with making a product or providing a service. It is calculated before deducting administrative expenses, taxes, and interest payments.

American Express

Gross Profit

 = 

Revenue

-

Cost of Revenue

 = 
28.78 B
Gross Profit varies significantly from one sector to another and tells an investor how much money a business would have made if it didn't have to pay any overhead expenses such as salary, taxes, or rent.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

American Express

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.21 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.

American Operating Margin Comparison

American Express is currently under evaluation in operating margin category among its peers.

American Express Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in American Express, profitability is also one of the essential criteria for including it into their portfolios because, without profit, American Express will eventually generate negative long term returns. The profitability progress is the general direction of American Express' change in net profit over the period of time. It can combine multiple indicators of American Express, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-3.1 B-2.9 B
Operating Income10.8 B6.7 B
Net Income8.4 B8.8 B
Income Tax Expense2.1 B1.3 B
Income Before Tax10.5 B5.4 B
Total Other Income Expense Net-249 M-236.6 M
Net Income Applicable To Common Shares8.5 B6.3 B
Change To Netincome1.6 B2.3 B

American Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on American Express. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of American Express position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the American Express' important profitability drivers and their relationship over time.

Use American Express in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if American Express position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Express will appreciate offsetting losses from the drop in the long position's value.

American Express Pair Trading

American Express Co Pair Trading Analysis

The ability to find closely correlated positions to American Express could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace American Express when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back American Express - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling American Express Co to buy it.
The correlation of American Express is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as American Express moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if American Express moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for American Express can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your American Express position

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Absolute Returns ETFs Theme
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Additional Tools for American Stock Analysis

When running American Express' price analysis, check to measure American Express' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy American Express is operating at the current time. Most of American Express' value examination focuses on studying past and present price action to predict the probability of American Express' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move American Express' price. Additionally, you may evaluate how the addition of American Express to your portfolios can decrease your overall portfolio volatility.