Is ENZ Able to Sustain its Profitability?

Does small-cap Medical Specialities company Enzo Biochem have a sustainably profitable business model? By studying its gross margins and comparing them to its operating margins, we can gain insight into quality of its business. With gross margins at 39.2%, you might be telling yourself the Enzo Biochem is profitable -- but there is more to the story.

Gross margins take into account only the cost of revenue, meaning the expenses directly related to each sale. So it's important to also look at operating margins, which take into account overhead costs. One way to look at it is that gross profit gives insight into Enzo Biochem's market and the viability of its business model. Operating margins, on the other hand, show you how efficiently the company is implementing this business model.

Date Reported Revenue ($ k) Cost of Revenue ($ k) Gross Margins (%) YoY Growth (%)
2022-07-31 107,071 65,104 39.2 -13.87
2021-07-31 117,731 64,154 45.51 45.54
2020-07-31 76,021 52,251 31.27 9.18
2019-07-31 81,170 57,922 28.64 n/a
Date Reported Total Revenue ($ k) Operating Expenses ($ k) Operating Margins (%) YoY Growth (%)
2022-07-31 107,071 57,474 -14.48 -414.78
2021-07-31 117,731 48,157 4.6 114.8
2020-07-31 76,021 47,408 -31.09 -131.09
2019-07-31 81,170 47,440 100 n/a

Over the last four years, Enzo Biochem's operating margins have averaged 14.8% and are growing at a rate of -42.1%. Despite the unprofitable results in the most recent year, there is no present indication that the company's lack of profitability is part of an endurring trend.

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