Investors, especially those who are inexperienced, often buy shares in companies with a compelling story, even if these companies are not profitable. However, as Peter Lynch once said, ‘Long shots almost never pay off.’ Investing in loss-making companies can be risky, as these companies are constantly striving to become financially sustainable.
On the other hand, many investors prefer to focus on companies like e.l.f. Beauty (NYSE:ELF), which not only have revenues but also profits. While profit is not the only factor to consider when investing, it is important to recognize businesses that can consistently generate profit.
e.l.f. Beauty has shown impressive growth in earnings per share (EPS) over the last three years, with a significant increase in the past year. This growth indicates a positive trend for the company. Additionally, the company has seen growth in EBIT margins and revenues, which are good signs for future growth.
Insiders at e.l.f. Beauty have a significant stake in the company, showing their alignment with shareholders’ interests. The CEO’s modest compensation also suggests a focus on shareholder interests.
Overall, e.l.f. Beauty’s soaring earnings per share, strong management ownership, and reasonable CEO compensation make it a company worth considering for investment. However, investors should be aware of potential risks. It is always important to carefully evaluate all factors before making investment decisions.