We Ran A Stock Scan For Earnings Growth And AXISCADES Technologies (NSE:AXISCADES) Passed With Ease

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. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 AXISCADES Technologies (NSE:AXISCADES). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide AXISCADES Technologies with the means to add long-term value to shareholders.

See our latest analysis for AXISCADES Technologies

How Quickly Is AXISCADES Technologies Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. To the delight of shareholders, AXISCADES Technologies has achieved impressive annual EPS growth of 41%, compound, over the last three years. Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.

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. The good news is that AXISCADES Technologies is growing revenues, and EBIT margins improved by 2.4 percentage points to 14%, over the last year. That's great to see, on both counts.

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.

While it's always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check AXISCADES Technologies' balance sheet strength, before getting too excited.

Are AXISCADES Technologies Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that AXISCADES Technologies insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at ₹1.2b. This considerable investment should help drive long-term value in the business. Despite being just 4.6% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Is AXISCADES Technologies Worth Keeping An Eye On?

AXISCADES Technologies' 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. So based on this quick analysis, we do think it's worth considering AXISCADES Technologies for a spot on your watchlist. Still, you should learn about the 2 warning signs we've spotted with AXISCADES Technologies.

Although AXISCADES Technologies certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Indian companies that not only boast of strong growth but have also seen recent insider buying..

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.