Should You Be Adding thyssenkrupp nucera KGaA (ETR:NCH2) To Your Watchlist Today?

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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 thyssenkrupp nucera KGaA (ETR:NCH2). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

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How Fast Is thyssenkrupp nucera KGaA Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. We can see that in the last three years thyssenkrupp nucera KGaA grew its EPS by 12% per year. That's a pretty good rate, if the company can sustain it.

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. thyssenkrupp nucera KGaA maintained stable EBIT margins over the last year, all while growing revenue 33% to €969m. That's progress.

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.

Check out our latest analysis for thyssenkrupp nucera KGaA

Fortunately, we've got access to analyst forecasts of thyssenkrupp nucera KGaA's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are thyssenkrupp nucera KGaA Insiders Aligned With All Shareholders?

It's a good habit to check into a company's remuneration policies to ensure that the CEO and management team aren't putting their own interests before that of the shareholder with excessive salary packages. The median total compensation for CEOs of companies similar in size to thyssenkrupp nucera KGaA, with market caps between €858m and €2.7b, is around €1.6m.

The thyssenkrupp nucera KGaA CEO received total compensation of just €775k in the year to September 2024. That looks like a modest pay packet, and may hint at a certain respect for the interests of shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.

Does thyssenkrupp nucera KGaA Deserve A Spot On Your Watchlist?

One important encouraging feature of thyssenkrupp nucera KGaA is that it is growing profits. On top of that, our faith in the board of directors is strengthened by the fact of the reasonable CEO pay. So all in all thyssenkrupp nucera KGaA is worthy at least considering for your watchlist. However, before you get too excited we've discovered 1 warning sign for thyssenkrupp nucera KGaA that you should be aware of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in DE with promising growth potential and insider confidence.

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.