For some speculators, the excitement of investing in a company that has the potential to reverse its fortunes is a big draw, so even a company with no revenue or profits and an underperforming track record can still manage to find investors. I can. In some cases, these stories can cloud investors' minds and lead them to invest based on their emotions rather than the merits of a good company's fundamentals. Loss-making companies are not yet profitable, so the inflow of external capital may eventually dry up.
If this kind of company isn't your style, but you like companies that generate revenue and even profits, you might be interested in companies like: global education (NSE:Global). This is not to say that the company offers the best investment opportunities, but profitability is a key factor in business success.
See the latest analysis on global education.
How fast is Global Education growing its earnings per share?
Over the past three years, Global Education has grown its earnings per share (EPS) at an impressive rate from a relatively low point. As a result, the three-year growth rate is not particularly indicative of future performance. Therefore, it makes sense to focus on more recent growth rates instead. Over the last 12 months, Global Education's EPS grew impressively at 7.74 ₹18.92. This kind of 144% year-over-year growth is unusual. Shareholders will hope this is a sign that the company is reaching a turning point.
One way to double-check a company's growth is to look at how its revenue and earnings before interest, tax, and tax (EBIT) margins are changing. Global Education shareholders can take comfort from the fact that its EBIT margin has risen from his 36% to 58% and its revenue is growing. On both counts, it's great to see.
In the graph below, you can see how the company has grown its revenue and revenue over time. Click on the graph to see the actual numbers.
Global Education isn't a very large company, given its market capitalization of ₹5.3b. Therefore, it is very important to check the strength of the balance sheet.
Are Global Education's insiders aligned with all shareholders?
It's always a good idea to check whether management is being compensated reasonably before investing. Salary levels near or below the median may indicate that shareholder interests are well taken into consideration. Our analysis found that the median total compensation for a CEO at companies like Global Education with a market capitalization of less than his ₹17b is around ₹3.3m.
Global Education's CEO received a total remuneration of only Rs 2.5 million for the year ending March 2023. This can be considered a token amount and indicates that the company does not need to make payments to motivate his CEO, which is often a good sign. CEO compensation may not be the most important aspect for a company to consider, but if it's reasonable, it gives us a little bit more confidence that management is looking out for shareholder interests. The argument is generally made that a reasonable salary level is evidence of good decision making.
Is global education worth attention?
Global Education's earnings per share growth has been increasing at a significant rate. Such rapid EPS growth begs the question: has the business reached a tipping point? On the other hand, the fact that the CEO's remuneration is very reasonable is a great reassurance, as it indicates that he doesn't have any wasteful spending habits. Faced with these facts, it seems that by investigating this stock a little more closely, you might be able to discover investment opportunities that meet your quality criteria.I should say we discovered Three red flags for global education What you need to know before investing here.
Global Education certainly looks good, but if insiders have been buying up shares, it could become more attractive to more investors. If you want to know which companies have insider buying, then take a look at this curated selection of Indian companies that not only boast strong growth, but also have recent insider buying.
Please note that insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis, including below, to see if Global Education is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
