Do Green Landscaping Group's (STO:GREEN) 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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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 Green Landscaping Group (STO:GREEN). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Green Landscaping Group with the means to add long-term value to shareholders.

Check out our latest analysis for Green Landscaping Group

Green Landscaping Group's Improving Profits

Green Landscaping Group 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. In impressive fashion, Green Landscaping Group's EPS grew from kr2.18 to kr3.68, over the previous 12 months. It's a rarity to see 69% year-on-year growth like that. That could be a sign that the business has reached 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. EBIT margins for Green Landscaping Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 55% to kr5.2b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Green Landscaping Group's forecast profits?

Are Green Landscaping Group 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. So it is good to see that Green Landscaping Group insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at kr512m. This considerable investment should help drive long-term value in the business. Those holdings account for over 12% of the company; visible skin in the game.

It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. Our quick analysis into CEO remuneration would seem to indicate they are. The median total compensation for CEOs of companies similar in size to Green Landscaping Group, with market caps between kr2.1b and kr8.5b, is around kr6.0m.

Green Landscaping Group offered total compensation worth kr4.5m to its CEO in the year to December 2022. That comes in below the average for similar sized companies and seems pretty reasonable. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.

Does Green Landscaping Group Deserve A Spot On Your Watchlist?

Green Landscaping Group's earnings per share have been soaring, with growth rates sky high. The sweetener is that insiders have a mountain of stock, and the CEO remuneration is quite reasonable. The strong EPS improvement suggests the businesses is humming along. Big growth can make big winners, so the writing on the wall tells us that Green Landscaping Group is worth considering carefully. We don't want to rain on the parade too much, but we did also find 2 warning signs for Green Landscaping Group that you need to be mindful of.

Although Green Landscaping Group 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.