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Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Netcall (LON:NET). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Netcall with the means to add long-term value to shareholders.
Check out our latest analysis for Netcall
How Fast Is Netcall Growing Its Earnings Per Share?
In the last three years Netcall's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, Netcall's EPS grew from UK£0.0079 to UK£0.021, over the previous 12 months. It's not often a company can achieve year-on-year growth of 163%.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. The good news is that Netcall is growing revenues, and EBIT margins improved by 2.2 percentage points to 11%, over the last year. Both of which are great metrics to check off for potential growth.
In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.
While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Netcall?
Are Netcall 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. So it is good to see that Netcall insiders have a significant amount of capital invested in the stock. To be specific, they have UK£21m worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 13% of the company; visible skin in the game.