Here's Why We Think YETI Holdings (NYSE:YETI) Is Well Worth Watching

By
Simply Wall St
Published
April 07, 2021
NYSE:YETI

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in YETI Holdings (NYSE:YETI). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

View our latest analysis for YETI Holdings

How Fast Is YETI Holdings Growing Its Earnings Per Share?

Over the last three years, YETI Holdings has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. Thus, it makes sense to focus on more recent growth rates, instead. Like the last firework on New Year's Eve accelerating into the sky, YETI Holdings's EPS shot from US$0.60 to US$1.79, over the last year. Year on year growth of 200% is certainly a sight to behold.

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. YETI Holdings shareholders can take confidence from the fact that EBIT margins are up from 9.8% to 20%, and revenue is growing. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.

earnings-and-revenue-history
NYSE:YETI Earnings and Revenue History April 7th 2021

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

Are YETI Holdings Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$6.5b company like YETI Holdings. But we are reassured by the fact they have invested in the company. Notably, they have an enormous stake in the company, worth US$393m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!

Is YETI Holdings Worth Keeping An Eye On?

YETI Holdings's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company. At times fast EPS growth is a sign the business has reached an inflection point; and I do like those. So to my mind YETI Holdings is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. It is worth noting though that we have found 2 warning signs for YETI Holdings that you need to take into consideration.

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

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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