Stock Analysis

Does Telecom Plus (LON:TEP) Deserve A Spot On Your Watchlist?

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' 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.

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 Telecom Plus (LON:TEP). 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 Quickly Is Telecom Plus Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Shareholders will be happy to know that Telecom Plus' EPS has grown 28% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Telecom Plus' EBIT margins are flat but, worryingly, its revenue is actually down. While this may raise concerns, investors should investigate the reasoning behind this.

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.

earnings-and-revenue-history
LSE:TEP Earnings and Revenue History August 21st 2025

View our latest analysis for Telecom Plus

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

Are Telecom Plus Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

One gleaming positive for Telecom Plus, in the last year, is that a certain insider has buying shares with ample enthusiasm. Specifically, the Non-Executive Chairman, Charles Wigoder, accumulated UK£3.5m worth of shares at a price of UK£17.70. It doesn't get much better than that, in terms of large investments from insiders.

Along with the insider buying, another encouraging sign for Telecom Plus is that insiders, as a group, have a considerable shareholding. We note that their impressive stake in the company is worth UK£105m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Is Telecom Plus Worth Keeping An Eye On?

For growth investors, Telecom Plus' raw rate of earnings growth is a beacon in the night. On top of that, insiders own a significant piece of the pie when it comes to the company's stock, and one has been buying more. These things considered, this is one stock worth watching. We don't want to rain on the parade too much, but we did also find 2 warning signs for Telecom Plus (1 is potentially serious!) that you need to be mindful of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Telecom Plus, you'll probably love this curated collection of companies in GB that have an attractive valuation alongside insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Valuation is complex, but we're here to simplify it.

Discover if Telecom Plus might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.