I Ran A Stock Scan For Earnings Growth And Carbon Studio Spólka Akcyjna (WSE:CRB) Passed With Ease

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

So if you're like me, you might be more interested in profitable, growing companies, like Carbon Studio Spólka Akcyjna (WSE:CRB). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

Check out our latest analysis for Carbon Studio Spólka Akcyjna

How Fast Is Carbon Studio Spólka Akcyjna Growing Its Earnings Per Share?

Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So EPS growth can certainly encourage an investor to take note of a stock. Like a wedge-tailed eagle on the wind, Carbon Studio Spólka Akcyjna's EPS soared from zł0.77 to zł1.02, in just one year. That's a impressive gain of 33%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. On the one hand, Carbon Studio Spólka Akcyjna's EBIT margins fell over the last year, but on the other hand, revenue grew. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Since Carbon Studio Spólka Akcyjna is no giant, with a market capitalization of zł90m, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Carbon Studio Spólka Akcyjna Insiders Aligned With All Shareholders?

Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So as you can imagine, the fact that Carbon Studio Spólka Akcyjna insiders own a significant number of shares certainly appeals to me. In fact, they own 58% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes me think they will be incentivised to plan for the long term - something I like to see. Valued at only zł90m Carbon Studio Spólka Akcyjna is really small for a listed company. So despite a large proportional holding, insiders only have zł53m worth of stock. That might not be a huge sum but it should be enough to keep insiders motivated!

Is Carbon Studio Spólka Akcyjna Worth Keeping An Eye On?

Given my belief that share price follows earnings per share you can easily imagine how I feel about Carbon Studio Spólka Akcyjna's strong EPS growth. Further, the high level of insider ownership impresses me, and suggests that I'm not the only one who appreciates the EPS growth. So this is very likely the kind of business that I like to spend time researching, with a view to discerning its true value. You should always think about risks though. Case in point, we've spotted 4 warning signs for Carbon Studio Spólka Akcyjna you should be aware of, and 2 of them are concerning.

Although Carbon Studio Spólka Akcyjna certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, 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. 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.
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