Stock Analysis

Does Ybox Real Estate (TLV:YBOX) Deserve A Spot On Your Watchlist?

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TASE:YBOX
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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 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.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Ybox Real Estate (TLV:YBOX). 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.

Check out the opportunities and risks within the IL Capital Markets industry.

How Fast Is Ybox Real Estate Growing Its Earnings Per Share?

Ybox Real Estate has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. Impressively, Ybox Real Estate's EPS catapulted from ₪0.11 to ₪0.24, over the last year. It's not often a company can achieve year-on-year growth of 121%. The best case scenario? That the business has hit a true inflection point.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. While Ybox Real Estate did well to grow revenue over the last year, EBIT margins were dampened at the same time. So it seems the future may hold further growth, especially if EBIT margins can remain steady.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

earnings-and-revenue-history
TASE:YBOX Earnings and Revenue History December 1st 2022

Ybox Real Estate isn't a huge company, given its market capitalisation of ₪239m. That makes it extra important to check on its balance sheet strength.

Are Ybox Real Estate Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So as you can imagine, the fact that Ybox Real Estate insiders own a significant number of shares certainly is appealing. Indeed, with a collective holding of 62%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. In terms of absolute value, insiders have ₪148m invested in the business, at the current share price. That's nothing to sneeze at!

Is Ybox Real Estate Worth Keeping An Eye On?

Ybox Real Estate's earnings per share growth have been climbing higher at an appreciable rate. 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 Ybox Real Estate very closely. You should always think about risks though. Case in point, we've spotted 4 warning signs for Ybox Real Estate you should be aware of, and 2 of them are potentially serious.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with 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 helping make it simple.

Find out whether Ybox Real Estate is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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