With EPS Growth And More, Eagle Eye Solutions Group (LON:EYE) Makes An Interesting Case
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Eagle Eye Solutions Group (LON:EYE). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Check out our latest analysis for Eagle Eye Solutions Group
Eagle Eye Solutions Group's Improving Profits
Eagle Eye Solutions Group has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. Outstandingly, Eagle Eye Solutions Group's EPS shot from UK£0.021 to UK£0.04, over the last year. It's not often a company can achieve year-on-year growth of 89%. That could be a sign that the business has reached a true inflection point.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for Eagle Eye Solutions Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 36% to UK£43m. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Eagle Eye Solutions Group's future profits.
Are Eagle Eye Solutions Group Insiders Aligned With All Shareholders?
It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Eagle Eye Solutions Group shares worth a considerable sum. Given insiders own a significant chunk of shares, currently valued at UK£52m, they have plenty of motivation to push the business to succeed. At 33% of the company, the co-investment by insiders fosters confidence that management will make long-term focussed decisions.
Does Eagle Eye Solutions Group Deserve A Spot On Your Watchlist?
Eagle Eye Solutions Group's earnings have taken off in quite an impressive fashion. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Eagle Eye Solutions Group very closely. We don't want to rain on the parade too much, but we did also find 2 warning signs for Eagle Eye Solutions Group that you need to be mindful of.
Although Eagle Eye Solutions Group certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of British companies that not only boast of strong growth but have also seen recent insider buying..
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
