Do Organization of Football Prognostics' (ATH:OPAP) Earnings Warrant Your Attention?

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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 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 Organization of Football Prognostics (ATH:OPAP). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Organization of Football Prognostics with the means to add long-term value to shareholders.

Check out our latest analysis for Organization of Football Prognostics

Organization of Football Prognostics' Improving Profits

In the last three years Organization of Football Prognostics' 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, Organization of Football Prognostics' EPS grew from €0.99 to €1.77, over the previous 12 months. It's not often a company can achieve year-on-year growth of 78%. The best case scenario? That the business has hit a true inflection point.

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. On the revenue front, Organization of Football Prognostics has done well over the past year, growing revenue by 69% to €1.4b but EBIT margin figures were less stellar, seeing a decline over the last 12 months. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

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

Are Organization of Football Prognostics Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a €5.5b company like Organization of Football Prognostics. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they hold €18m worth of its stock. This considerable investment should help drive long-term value in the business. Even though that's only about 0.3% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Should You Add Organization of Football Prognostics To Your Watchlist?

Organization of Football Prognostics' 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 Organization of Football Prognostics very closely. Before you take the next step you should know about the 3 warning signs for Organization of Football Prognostics (2 are significant!) that we have uncovered.

Although Organization of Football Prognostics certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.