Should You Be Adding Marathon Nextgen Realty (NSE:MARATHON) To Your Watchlist Today?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. 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.

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 Marathon Nextgen Realty (NSE:MARATHON). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

View our latest analysis for Marathon Nextgen Realty

How Fast Is Marathon Nextgen Realty Growing Its Earnings Per Share?

In the last three years Marathon Nextgen Realty's 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. Outstandingly, Marathon Nextgen Realty's EPS shot from ₹12.28 to ₹36.50, over the last year. It's not often a company can achieve year-on-year growth of 197%. That could be a sign that the business has reached a true inflection point.

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. Marathon Nextgen Realty shareholders can take confidence from the fact that EBIT margins are up from 25% to 35%, and revenue is growing. That's great to see, on both counts.

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.

Marathon Nextgen Realty isn't a huge company, given its market capitalisation of ₹21b. That makes it extra important to check on its balance sheet strength.

Are Marathon Nextgen Realty Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Shareholders will be pleased by the fact that insiders own Marathon Nextgen Realty shares worth a considerable sum. Indeed, they hold ₹2.1b worth of its stock. This considerable investment should help drive long-term value in the business. As a percentage, this totals to 9.8% of the shares on issue for the business, an appreciable amount considering the market cap.

Should You Add Marathon Nextgen Realty To Your Watchlist?

Marathon Nextgen Realty's earnings per share growth have been climbing higher at an appreciable rate. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. 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 Marathon Nextgen Realty very closely. However, before you get too excited we've discovered 1 warning sign for Marathon Nextgen Realty that you should be aware of.

Although Marathon Nextgen Realty 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.