Does Haypp Group (STO:HAYPP) Deserve A Spot On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

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

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How Fast Is Haypp Group Growing Its Earnings Per Share?

Investors and investment funds chase profits, and that means share prices tend rise with positive earnings per share (EPS) outcomes. Which is why EPS growth is looked upon so favourably. It is awe-striking that Haypp Group's EPS went from kr0.17 to kr1.51 in just one year. While it's difficult to sustain growth at that level, it bodes well for the company's outlook for the future. This could point to the business hitting a point of inflection.

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. EBIT margins for Haypp Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 16% to kr3.7b. That's a real positive.

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.

Check out our latest analysis for Haypp Group

Haypp Group isn't a huge company, given its market capitalisation of kr2.9b. That makes it extra important to check on its balance sheet strength .

Are Haypp Group Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. Shareholders will be pleased by the fact that insiders own Haypp Group shares worth a considerable sum. Indeed, they hold kr220m worth of its stock. This considerable investment should help drive long-term value in the business. That amounts to 7.5% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add Haypp Group To Your Watchlist?

Haypp Group's earnings have taken off in quite an impressive fashion. 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 Haypp Group very closely. Another important measure of business quality not discussed here, is return on equity (ROE). Click on this link to see how Haypp Group shapes up to industry peers, when it comes to ROE.

Although Haypp Group certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Swedish companies that not only boast of strong growth but have strong insider backing.

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.