Is Now The Time To Put CrossFirst Bankshares (NASDAQ:CFB) 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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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

See our latest analysis for CrossFirst Bankshares

How Fast Is CrossFirst Bankshares Growing Its Earnings Per Share?

Over the last three years, CrossFirst Bankshares has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. In previous twelve months, CrossFirst Bankshares' EPS has risen from US$1.24 to US$1.35. That's a modest gain of 8.6%.

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. It's noted that CrossFirst Bankshares' revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. CrossFirst Bankshares maintained stable EBIT margins over the last year, all while growing revenue 16% to US$231m. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

Fortunately, we've got access to analyst forecasts of CrossFirst Bankshares' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are CrossFirst Bankshares 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. CrossFirst Bankshares followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. To be specific, they have US$39m worth of shares. That's a lot of money, and no small incentive to work hard. That amounts to 5.8% of the company, demonstrating a degree of high-level alignment with shareholders.

It's good to see that insiders are invested in the company, but are remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. For companies with market capitalisations between US$400m and US$1.6b, like CrossFirst Bankshares, the median CEO pay is around US$3.3m.

The CEO of CrossFirst Bankshares only received US$1.6m in total compensation for the year ending December 2022. That looks like a modest pay packet, and may hint at a certain respect for the interests of shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Does CrossFirst Bankshares Deserve A Spot On Your Watchlist?

As previously touched on, CrossFirst Bankshares is a growing business, which is encouraging. Earnings growth might be the main attraction for CrossFirst Bankshares, but the fun does not stop there. Boasting both modest CEO pay and considerable insider ownership, you'd argue this one is worthy of the watchlist, at least. It is worth noting though that we have found 1 warning sign for CrossFirst Bankshares that you need to take into consideration.

Although CrossFirst Bankshares 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 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.