Yahoo Finance Do Ranger Energy Services' (NYSE:RNGR) Earnings Warrant Your Attention?
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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
In contrast to all that, many investors prefer to focus on companies like Ranger Energy Services (NYSE:RNGR), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
Check out our latest analysis for Ranger Energy Services
How Fast Is Ranger Energy Services Growing Its Earnings Per Share?
Ranger Energy Services has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. Ranger Energy Services' EPS skyrocketed from US$0.66 to US$1.01, in just one year; a result that's bound to bring a smile to shareholders. That's a fantastic gain of 53%.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. While we note Ranger Energy Services achieved similar EBIT margins to last year, revenue grew by a solid 4.6% to US$637m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Ranger Energy Services' future EPS 100% free.
Are Ranger Energy Services Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Despite some Ranger Energy Services insiders disposing of some shares, we note that there was US$122k more in buying interest among those who know the company best On balance, that's a good sign. We also note that it was the President, Stuart Bodden, who made the biggest single acquisition, paying US$147k for shares at about US$9.85 each.
Is Ranger Energy Services Worth Keeping An Eye On?
If you believe that share price follows earnings per share you should definitely be delving further into Ranger Energy Services' strong EPS growth. Not only is that growth rate rather juicy, but the insider buying adds fuel to the fire. In essence, your time will not be wasted checking out Ranger Energy Services in more detail. It is worth noting though that we have found 1 warning sign for Ranger Energy Services that you need to take into consideration.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Ranger Energy Services, you'll probably love this curated collection of companies in the US that have witnessed growth alongside 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. 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.
