Do Quickstep Holdings's (ASX:QHL) Earnings Warrant Your Attention?

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

So if you're like me, you might be more interested in profitable, growing companies, like Quickstep Holdings (ASX:QHL). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

Check out our latest analysis for Quickstep Holdings

How Fast Is Quickstep Holdings Growing Its Earnings Per Share?

In the last three years Quickstep Holdings's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Quickstep Holdings boosted its trailing twelve month EPS from AU$0.0044 to AU$0.0055, in the last year. That's a 23% gain; respectable growth in the broader scheme of things.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Quickstep Holdings maintained stable EBIT margins over the last year, all while growing revenue 12% to AU$82m. That's progress.

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.

Quickstep Holdings isn't a huge company, given its market capitalization of AU$63m. That makes it extra important to check on its balance sheet strength.

Are Quickstep Holdings Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Quickstep Holdings insiders both bought and sold shares over the last twelve months, but they did end up spending AU$53k more on stock than they received from selling it. So, on balance, the insider transactions are mildly encouraging. Zooming in, we can see that the biggest insider purchase was by CEO, MD & Director Mark Burgess for AU$143k worth of shares, at about AU$0.09 per share.

Should You Add Quickstep Holdings To Your Watchlist?

One positive for Quickstep Holdings is that it is growing EPS. That's nice to see. While some companies are struggling to grow EPS, Quickstep Holdings seems free from that morose affliction. The gravy on the mushroom pie is the insider buying, which has me tasting potential opportunity; one for the watchlist, I'd posit. You still need to take note of risks, for example - Quickstep Holdings has 3 warning signs (and 2 which can't be ignored) we think you should know about.

As a growth investor I do like to see insider buying. But Quickstep Holdings isn't the only one. You can see a a free list of them here.

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. 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.
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